Investment-linked insurance products: complexity label a long time coming

THE recent news about the rising number of complaints against investment-linked insurance policies (ILPs) isn’t surprising. In 2024, complaints about ILPs filed with the Financial Industry Disputes Resolution Centre (Fidrec) reportedly hit a high of 211, up from 55 in 2023.

This year, 57 complaints were lodged in the first half-year.

ILP sales have surged since around 2022, overtaking traditional participating plans. The sale of ILPs, especially those sold in single-premium mode, tends to rise when markets are strong. But for a product as complex as an ILP, a rising risk appetite driven by fear of missing out and aggressive sales tactics by insurance representatives make a potent brew for mis-selling.