Investment-linked insurance plans (ILPs) are policies that have life insurance coverage and investment components. While some see ILPs as a financial product that offers the 'best of both worlds' benefits to policyholders, others are a little warier, believing that they'd end up better off if they were to keep their wealth accumulation goals distinct from insurance plans. Unfortunately for the latter, their scepticism could be holding them back from leveraging one of the most powerful financial tools available in the market. To prevent you from making that mistake, let’s take a look at 4 widespread misconceptions about ILPs – and why they’re wrong.
Myth #1: You’ll Be Locked into an ILP Sub-Fund
| Initial Amount (S$) |
Total Savings After 10 Years; Interest Rate at 0.4% (S$) |
Total Savings After 10 Years; Annual Returns at 9.4% (S$) |
Difference (S$) |
| 50,000 |
52,036.39 |
122,784.41 |
70,748.02 |
| 100,000 |
104,072.77 |
245,568.82 |
141,496.05 |
| 150,000 |
156,109.16 |
368,353.23 |
212,244.07 |
| 200,000 |
208,145.55 |
491,137.64 |
282,992.09 |
With ILPs, your premiums are used to pay for units in one or more sub-funds of your choice,...
