“The Bad” 1. Potentially high initial sales charge – ILP will usually impose high initial sale charge, thus rendering it unsuitable for people with short investment horizon as it could deeply affect your overall return in the first few years.

Why is ILP not good?

Like any other financial investment product, an ILP carries investment risk, which does not provide guaranteed returns. That means the value of your investments will fluctuate according to market conditions, and you may incur losses if you choose to surrender your policy ahead of maturity.

How long does ILP take to break even?

A typical ILP might take up to 8 or more years to break even, beyond which the policy owner really reaps the benefits of such a plan.

When can you sell ILP?

The best time to buy over a 2^nd hand ILP is at the end of the $0 surrender value period. Typically, this is end of 18 months or 24 months. Of course, there will be no seller willing to depart with $0 surrender value.

Are the returns on investment-linked funds guaranteed?

Q: Is the return on an investment-linked fund guaranteed? A: No, the return on an investment-linked fund is not guaranteed. This is because the price of the units that you hold may rise or fall depending on the market value of the investment.

4 Reasons to AVOID Investment-Linked Policies (ILP)

30 related questions found

Is ILP an endowment plan?

ILPs invest your money in your chosen sub-funds (hence the term “investment-linked”), for which you receive non-guaranteed returns. ... With endowment plans, the premiums go into the insurer's participating fund.

What can affect sustainability in ILP?

Other factors may also deplete the value of your ILP, such as: failing to pay premiums/contributions when they are due, deciding not to increase premiums/contributions despite adding riders, choosing not to increase premiums/contributions when there is an increase in insurance/tabarru charges, or when you make partial ...

Is AXA Wealth accelerate good?

AXA Wealth Accelerate may potentially be a good fit if the following matters to you: To participate in the long-term financial returns of investing. Liquidity or flexibility of withdrawal in your Insurance policy. ... Potentially higher financial returns compared to traditional Endowment and Whole Life Policy.

What ILP 101?

A 101 ILP, is still an ILP. About the only reasonable benefits I can think of is that there is a death benefit of 101% of your premiums paid (hence, the name 101), which pretty much guarantees your capital, but only on death.

Is ILP a unit trust?

An ILP is a wrapper for unit trust. So it's underlying asset is a sub fund of Unit Trusts.

Are investment-linked insurance worth it?

ILPs are better suited for those with a longer investment horizon to ride out market fluctuations and defray initial costs which can significantly limit short-term potential returns. The insurance coverage between ILPs differ.

Is AIA Pro Achiever an ILP?

AIA Pro Achiever 2.0 is a regular premium Investment-linked Plan (ILP) offered by AIA. Investments in this plan are subject to investment risks including the possible loss of the principal amount invested.

What is ILP sub fund?

An Investment-Linked Policy (ILP) is a hybrid financial product; it provides both life insurance, as well as wealth accumulation. When you purchase an ILP, your premiums are used to buy units in various sub-funds.

Is ILP transparent?

An ILP is transparent for Irish tax purposes such that the income and gains of an ILP are treated as accruing directly to each partner of the ILP in proportion to the value of the interests beneficially owned by the partner.

What is Xirr?

XIRR stands for the individual rate of return. It's your real investment return. XIRR is a tool for calculating returns on assets where many transactions occur at different times.

What is ILP system?

Inner Line Permit (ILP) is an official travel document issued by the Government of India to allow inward travel of an Indian citizen into a protected area for a limited period. It is obligatory for Indian citizens from outside those states to obtain a permit for entering into the protected state.

Can I sell my ILP?

You can't sell it to another person (at the moment, only endowment and whole life policies can be sold) Surrendering is your only option, but you should only exercise it after giving consideration to the alternatives, e.g. if it was providing you with essential CI cover, then ensure you have managed to continue that ...

What is AXA Pulsar?

Website: Pulsar Product Summary. Important Note. PULSAR is a regular premium investment-linked plan (ILP) that offers a range of ILP sub-funds for investment. It offers 2 different policy currencies i.e. USD and SGD for the Policyholders to invest in.

Is great wealth advantage a ILP?

GREAT Wealth Advantage is a regular premium whole life investment-linked plan (ILP) designed to meet your wealth accumulation needs, as well as provide you with financial protection against death, total and permanent disability (TPD) and terminal illness.

Is AXA Wealth treasure a ILP?

AXA Wealth Treasure is a limited pay Investment-Linked Plan that is designed to give you the flexibility to choose your own premium amount and Premium Payment Term to suit your financial goals. ... AXA Wealth Treasure provides insurance coverage against death and terminal illness of the Life Assured.

Is AXA Wealth accelerate an ILP?

AXA Wealth Accelerate is a whole life, Regular Premium Investment Linked Plan (“ILP”) which rewards You with up to three types of bonuses (Start-up Bonus, Power-up Bonus and Loyalty Bonus) along the Policy term as You invest. ... You will also be protected against Death and Terminal Illness during the Policy term.

What is fund switching?

Fund switching is a feature of ULIP which enables the policyholders to shift their money from one fund to another within the same plan. Policyholders can choose the fund as per their financial goals and risk tolerance. A thing to keep in mind is that insurance companies allow limited switches.

What is the PRURetirement growth?

PRURetirement Growth is a one-off premium investment-linked plan that pays you a monthly guaranteed income and has the potential to grow in investment according to your needs. Choose how long you want to accumulate your funds and the number of years that you will receive the monthly income.

What can affect sustainability?

What are the factors affecting sustainability? In modern society, the concept of sustainable development is based on three factors, which are economic development, environmental conservation, and social justice.

Are ILP capital guaranteed?

Here are some factors that can help you spot an ILP: Mix of investment and protection: ILPs offer both life coverage as well as investment returns. No guaranteed returns or cash value: Keep a lookout to see if there are any guaranteed returns. ILPs don't offer any guaranteed returns or cash value.