Singapore Investment-linked Insurance
Investment-linked Insurance
What is Investment-linked Insurance (ILP)
An ILP is a plan with a guaranteed minimum death benefit but it may increase if the invested value of the policy goes up. The premiums paid can be used to invest in your choice of stocks, real estate investment trust (REITs), bonds, money- market funds, and any combination. If your chosen funds perform well, the value of your investment-linked policy increases, but a minimum death benefit is guaranteed. Premiums are fixed and level; they are roughly the same as what you would pay for whole life. Many investment-linked whole life policies also include an annuity feature. singapore investment-linked insurance
Typically you can change the "mix" of your investments for unlimited number of times with no charge. You may also change the amount of the sum assured and premium and top up or sell your funds subject to the terms and conditions of the policy.
A disadvantage of investment-linked whole life is that you may lose your capital if your chosen investment "mix" performs poorly. You would receive annual reports on the past performance of the funds. In the early years of the policy, the surrender value is small because much of the premium you pay goes to cover expenses and fees. An investment-linked plan is best considered as a long-term financial commitment.
If you need a good protection yet flexible premium payment and with the potential of higher returns, investment-linked plan may be the option for you.
