I-L-P… stands for investment linked policies, and you might have read or heard this abbreviation during your conversations with friends and family. But, what is it really, and how does it work?
It's time to get a deeper understanding of ILPs and bust some of the myths you might have heard about them.
What is an ILP?
An ILP is an investment-linked plan that offers a dual benefit of financial protection in the form of insurance coverage and growth opportunities for your money. Premiums that you pay are invested by professional fund managers, into a portfolio of your equities and/or bonds, in line with the investment objective of the fund. Your returns will then be pegged to the performance of your selected portfolio. ILPs also have a protection component that gives you financial support in the event of death or terminal illnesses.
What do people believe about ILPs?
ILPs are known to be costly, and not 100% of your premiums are invested
ILPs have gained a bad reputation over the years. They are often associated with high fees and hidden charges. Hence, many still believe that the first portion of premiums paid are often channeled towards covering costs.
But what if we told you that there are now ILPs that invest 100% of your premiums from Day 1?
These ensure that the money you put in is primarily for investments. To top it off, ILPs can now be purchased digitally without the need of a financial adviser's help.
It's hard to track my portfolio's performance
Keeping track of your ILP's performance can be difficult. Insurers typically provide half yearly reports on how ILPs are performing, making it challenging for individuals to keep up to date with the latest value. While customers are able to log into an online portal to keep track of the portfolio performance of their portfolio, this might be a hassle to some, who prefer frequent updates that are accessible in-app, and on the go. On the flipside, digital ILPs allow you to easily keep tabs on the performance of assets that have been invested, and the corresponding returns earned in-app—bringing greater visibility and convenience.
My choice of portfolio is final—no changes are allowed after
Switching between portfolios depending on your risk appetite is known to be a cumbersome process. Customers typically have to fill out extra paperwork and incur additional costs after exceeding the number of fund switches per year. We know how frustrating that can be. This is where the beauty of digital ILPs comes in – they give you the freedom to choose a portfolio that you are most comfortable with and the flexibility to switch between portfolios – all in the app, and at no cost!
So, are ILPs the way to invest?
There are various ways to invest and grow your money, and getting an ILP is one of them. An ILP allows you to earn returns in a simple way and with minimal effort. As with all investment decisions, do evaluate your risk appetite, financial goals, and do your research.
Singlife Savvy Invest II
Singlife Savvy Invest II is a whole life, regular premium investment plan that combines investment opportunities and insurance protection.
Upon signup, you can enjoy a Welcome Bonus of up to 60% of your basic regular premium. What’s even better is the ability to maximise your investments (by up to 105%) in the ILP sub-funds of your choice.
While all of this might sound like a handful, you can rest assured as you’ll get to enjoy lifetime coverage against death and Terminal illness.
Click here for more information regarding Singlife Savvy Invest II, or to kick start your investment journey with us today!
