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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

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Genevieve Cua

Genevieve Cua

Published Mon, Mar 3, 2025 · 06:00 AM
    • Sales of investment-linked insurance plans surged last year. But consumers need to weigh the costs of ILPs against the purported benefits..
    • Sales of investment-linked insurance plans surged last year. But consumers need to weigh the costs of ILPs against the purported benefits.. PHOTO: PIXABAY

    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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