Best Investment-Linked Policy (ILP) Singapore June 2022
Offering the best of both worlds of Insurance and Investment, Investment-Linked Policies or ILPs, are simply having investment elements and insurance coverage packed into one policy. Should you be interested in a wealth growth instrument yielding higher than an endowment, ILP is one tool you can consider
What is an Investment-Linked Policy?
Putting together insurance coverage and investment (Unit Trust or Sub-funds), ILPs are a type of insurance policy that is similar to whole life plans.
However, instead of yielding interests through the underlying participating funds, Investment-Linked Policies offer higher wealth returns due to the investment into funds, as well as having a protection coverage coverage should death, TPD (total permanent disability) or even CI (critical illness) occur.
What Are The Differences Between a Whole Life Insurance Plan & Investment-Linked Policy?
It is true that an Investment-Linked Policy (ILP) has the influence of both worlds of Insurance and Investment. However, as with all financial products, an ILP is something to be considered with time, value as well as budget. It is true that an ILP potentially yields higher returns as compared to a whole life plan or endowment plan. This is made possible due to the fact that you, as a policy holder, will decide and choose the funds that will yield you the returns.
This is different as compared to a Whole Life Insurance plan because that is a participating policy that participates in the underlying participating fund, which does not offer a choice to the policy holder the flexibility of the areas of investment.
Similar to a Whole Life plan, ILPs do provide death coverage, TPD (Total Permanent Disability) protection as well as critical illness of different stages. The cost of insurance, or mortality charges, are deducted through the units invested via the unit trust.
Strong Wealth Instrument
Grow your wealth with at a good rate with a peace of mind. Strong returns, regulated and comes with calculated risks.
Hit Your Goals Earlier
Principal and interest yields are guaranteed as long as term obligations are fulfilled as per contract. This means they actually help you achieve your goals faster.
Prepare for the Unexpected
Capital is guaranteed in the event of Death, Total Permanent Disability and/or Terminal Illness. Critical Illness and Cancer are included. Safeguard your savings in the event of unexpected loss.
Best Investment- Linked Insurance Policy in Singapore 2022
There are many Investment-Linked Policies (ILPs) in the market, along with various sub-funds that come with it from various insurers in the market. The initial bonuses, historic returns, premium term and effective yield returns all play a part in growing your wealth.
We only select the most competitive ILPs in the market and compare them all and explain to you the in-depth differences as well as the different wealth accumulation and wealth growth aspects.
Singlife's Savvy Invest comes with 3 & 5 years flexible premium terms, as well as one of the lowest breakeven yields along with restricted funds.
Tokio Marine’s #goUltra is an ILP that comes with Initial Bonus, flexible and versatile to meet your needs should it change throughout your whole life. Coupled with low barrier of entry and high bonuses, TM #goUltra helps you take advantage of the market.
Capital guaranteed upon death and you are able to change the life assured to protect your investment. Invest in a huge array of strong funds. Versatile with no charges for withdrawal & fund switching as well as premium holidays, be sure that this ILP maximises your investing strategies.
The Tokio Marine Atlas Wealth has high start-up bonuses and loyalty bonus incentive with a limited pay premium term 1 year of lock in period. It is also very flexible with the premium holidays (without any charges), has low charges to break-even and you get to invest 100% of your premiums right from the start.
The AXA Wealth Harvest invests 100% of your regular premium & it comes with Start-up & Loyalty Bonuses that lasts till the end of the policy. Enhance your investment with a whopping 35% start-up bonus on your premium for the first year, giving you a good head start for your investment journey.
Etiqa's Invest Builder comes with short term Investment (3 years Available / 5 years), portfolio managed funds as well as principal guaranteed upon death throughout holding period. It also comes with premium freeze 12 months should the need arise.
Get the Best Investment- Linked Policy in Singapore 2022
There are many variations of Investment-Linked Policy (ILP) plans out there. We have specially reviewed and compare them for you so you don't have to do so.
Simply fill in the simple Investment-Linked Policy (ILP) questions to find the best savings plan to best grow your wealth suited to your needs. Our experienced licensed FA advisor will get in touch with you shortly upon your request.
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Frequently Asked Questions
ILPs are dual policies with two core components: insurance and investment. The premiums you pay are first used to purchase units in a sub-fund of your choice (investment). Subsequently, a portion of the units is then sold to pay for insurance and other charges, while the rest remain invested in the sub-funds.
When the sub-funds grow, so does your investment. As such, ILPs have become increasingly popular as a way of tackling two birds with one stone in recent years.
ILPs often offer a diverse selection of funds that you can choose to invest in – usually over 90 or even hundreds or more unique individual funds based on your preferences. These include retail funds as well as Accredited Investor (AI) funds. Dividend-paying sub-funds can allow dividend payouts in cash or reinvestment of the payouts for compound investments.
There are currently two options for ILPs:
- Single Premium Policy: one lump sum premium payment to purchase units in a sub-fund. Offers lower insurance coverage compared to Regular Premium Policy
- Regular Premium Policy: on-going premium payment. Insurance coverage can be adjusted based on individual needs and preferences.
Annual inflation causes the daily cost of living to rise through micro- or macro-inflation; the necessity to combat this regular price increase (important and healthy for the economy) is through legitimate wealth growth instruments that demonstrate higher returns that are able to beat rising costs.
Here we compare in-depth the charges, returns and break even yields for the ILPs in Singapore: Best Investment- Linked Policy Detailed In-Depth Comparison Singapore.
Hedge your risk and distribute investment burden: Short-term investments often carry higher risks and often, higher burdens as well. Long-term investments allow for more buffer time to make changes to your strategy over the course of your life.
Multiply your earnings: The compound interest effect is powerful. When you leave your initial investments along, your earnings earn you even more money.
Be disciplined when it comes to your financial health: As with any kind of health, even financial health requires regular investments in time and resources – setting aside a regular budget helps ensure that your personal finances can grow properly.
Live worry-free: With your finances taken care of, properly diversified, and earning you more money and buffer space, you can enjoy quality time with your loved ones, doing the things you enjoy in life.
Fluctuating market prices can affect investments, especially lump-sum investments. ILPs ensure the ability of not just investment, but regular investments with lower risks due to pairing with insurance. This enables more cost-effective savings, as regular fixed investments drive down the average cost per share over time.
The premiums that were previously being paid for insurance can serve a double-use in ILPs to purchase sub-funds with, thus allowing a chance for growth instead of stagnancy.
The Regular Premium Policies can be structured accordingly to provide higher coverages for the same premium paid compared to other policies. On top of that, policyholders can determine the allocation of premiums towards preferred sub-funds, which allows much greater flexibility and potentially higher returns compared to the Single Premium Policy or a normal insurance policy.
Another factor that contributes to regular premium being more advantageous is that it averages down the risks as the investment amount is spread across monthly over a volatile market. This greatly reduces the risk when the market is bearish (downwards) and invests systematically when the market is bullish (upwards).
On the other hand, Single Premium ILPs allow for maximising potential returns. Due to the lower coverage, most of the premium goes towards investment. Some sub-funds even offer regular dividends to supplement the investor’s lifestyle. We do note that the amount for expected payouts will correspond to the level of risk being taken. However, due to this increased risk, the payout for Single Premium ILPs in event of death is higher than that of the Regular Premium ILPs even if the valuation of the sub-fund is lower than the placement amount.
If you are concerned about rising costs of daily necessities (which may affect regular and retirement expenses) or your children’s tertiary education (maybe in 10-20 years), now is the time to begin looking into ILPs.
Due the possibility of compounding interest with your investment, the longer the amount of time your premium can spend within the sub-fund, the better the returns over time. Utilise ILPs to fund your retirement accounts, your regular life, or even the education of your children in the future.