Investment-linked insurance: No panacea for returns or protection
Their returns are not certain, and the death benefit is funded mainly by premiums and may not be guaranteed
MANY Singaporeans gravitate towards products with some guarantee, such as participating and non-par insurance plans. But life insurance sales for 2024 threw up a surprise.
Investment-linked plans (ILPs) streaked far ahead of par plans, with a surge of 41 per cent to S$2.25 billion in 2024, indicated Life Insurance Association (LIA) data. Meanwhile, par products dipped by 2.7 per cent.
ILPs are investment funds in an insurance wrapper. In contrast to par policies where the insurer invests on behalf of policyholders, in ILPs, policyholders pick funds and assume the investment risk.
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