Investment Linked Plan 101 Wrapper Overview
The “101 Wrapper” variant of Investment-Linked Insurance Plans (ILPs) is designed primarily as an investment vehicle with minimal or no insurance coverage. It typically guarantees at least 101% of the principal or market value upon death, providing a level of financial security. Many of these plans offer cost efficiencies through start-up and loyalty bonuses, making them competitive with traditional investment platforms. By allocating the full principal to investments, 101 Wrappers focus on maximizing returns while ensuring a basic level of protection.
Principal Protection
Ensure financial security during market downturns with guaranteed principal payout upon the insured’s death, regardless of market performance.
Institution or AI Funds
Unlock the ability for retail investors to get access to Accredited investor funds or Institutional funds not accessible in other regulated platforms within Singapore
Upfront & Loyalty Bonuses
Enjoy upfront and loyalty bonuses throughout your investment period, boosting your capital for long-term growth. Bonuses help offset costs, enhancing overall gains over time.
ILP 101 Plan F.A.Q
Find answers to commonly asked questions about Investment Linked Plan in Singapore
The key advantage of an Investment-Linked Plan (ILP) 101 wrapper is its insurance component, which serves as both protection and an exit strategy for the investment upon the insured’s death. Since investments are inherently volatile and subject to market fluctuations, unexpected life events, such as the policyholder’s passing, can lead to unforeseen financial uncertainties, especially during financial downturns. The insurance feature of an ILP helps safeguard the principal for the policyholder’s family, ensuring financial stability. Additionally, a premium waiver can be added, allowing the investment to continue even after the breadwinner’s death, securing long-term financial goals such as retirement savings for a spouse or funding children’s education.
The high charges associated with Investment-Linked Plans (ILPs) primarily arise from distribution costs, which cover advisor commissions for marketing the product on behalf of the insurer. These costs are typically funded through annual policy fees paid by the policyholder. Consequently, ILPs often incur annual charges exceeding 2%, excluding fund management fees.
These costs can be particularly burdensome for investors who cannot sustain their premium payments or complete the policy term, as early surrender or discontinuation may result in unexpectedly high overall charges. To mitigate this, investors should adopt a long-term approach, avoid low duration bond funds, and maximize the benefits of upfront and loyalty bonuses provided throughout the policy term.
To maximize the benefits of an Investment-Linked Plan (ILP), it’s important to have a reasonable investment horizon, choose a plan with the lowest breakeven yield for your desired premium term, and ensure you continue paying premiums throughout the committed period.
Another way to optimize an ILP is to select a plan that offers capital guarantees upon the insured’s death without requiring additional costs for insurance. Additionally, some ILPs calculate charges based on the assumed premium paid rather than the asset value, which can significantly reduce costs, potentially down to 0% per annum over the long term.
Investment is a personal decision best made after discussing with a trusted advisor. ILPs offer several advantages, including lower costs over the long term, access to exclusive funds, and an insurance component that provides a structured exit strategy for the investor’s family upon their passing. For individuals with specific financial objectives, ILPs can be a strategic option when planning their investments.
After our insurance experts contact you via your form submission to clarify your needs and guide you through your options. You can then apply ILP with them via online or face to face submission. Premium payments can be made via credit card (recurring setup), GIRO, AXS (physical stations, website, or app), or bank transfer through online banking