Aviva Ltd is a distributor for Grow by Singlife. The below article is prepared by Singlife. Permission required for reproduction.
I-L-P… stands for Investment linked policies, and you might have read or heard of this three letter word during your conversations with friends and family. In this article, we seek to provide a deeper understanding of ILPs and bust some of the myths you might have heard about ILPs.
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 will also provide you with financial protection 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 focused on investments. To top it off, ILPs can now be purchased digitally without the need of a financial adviser.
Tracking the performance of my portfolio is hard
Keeping track of the performance of your ILP 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 you 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. This creates customer friction and a complicated experience. The beauty of digital ILPs is that it offers 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 an ILP is one of them. An ILP allows you to earn returns in a way that is simple, and requires minimal effort on your part. As with all investment decisions, do evaluate your risk appetite, financial goals, and do your research!
Grow by Singlife
Grow is a digital ILP that was built to provide flexibility and ease when it comes to investments. Keep track of the portfolio’s performance and move your money easily between our 3 discretionary managed model portfolios, within our Singlife app. Find out more about Grow and kick start your investment journey with us today! Find out more here.
Note that the performance for your Grow portfolio is not guaranteed and the value of the units and the income accrued to the units (if any) may fall or rise.
Grow is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the LIA or SDIC web-sites (www.lia.org.sg or www.sdic.org.sg). This advertisement has not been reviewed by the Monetary Authority of Singapore.