I do not know what's the difference between savings plan and Investment linked policies. Which gives higher protection or coverage?

For an investment-linked policy, the premium is put in a fund that will be invested by the insurance company. You will be able to determine your allocation of asset that will maximise your long-term return. While it might have a higher rate of return, you will also have to bear the risk of the market.
Endowment policy constitutes less risk and is normally use for goal-based saving, such as university tuition fees or retirement. Unlike investment-linked policy, your money is placed in the Insurance company participating fund. Endowment policies, however, have a guaranteed component which investment linked policies do not offer.

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Hi Elijah,

They are actually very different.

An ILP would invest in Unit Trusts which would be chosen by you or the advisor, depending on the status of the CKA. There are many types of unit trusts, but they are all non-guaranteed and you will be exposed to the full upside and downside risks of the market.

Generally ILPs come in two sort, one with protection elements, and one that is purely geared for investments. Both will usually have a regular premium mode whereby you contribute monthly, but they will come with fees and some T&Cs with regards to withdrawals and premium holidays. Your coverage is either based on what you choose, or 101% of your premiums or account value, whichever is higher.

Saving or endowment plans are different in that they have a guaranteed maturity value from the very start. There are non-guaranteed bonuses as well, which depend on the performance of the insurer's participating fund (which is where your monies are invested in). However, no matter how bad the markets are, your guaranteed maturity value will always be there. Thus, you have potential upside return, but a downside protection from market downturns. Good plans will have returns that are better than capital guaranteed when held to maturity. However, due to the conservative nature of the portfolio (they hold mostly fixed income), the returns can only be so much.

Coverage wise, they are definitely not meant for covering events like CI or death/TPD. You would want to get a separate policy for that. They are best suited for time bound commitment such as children's education, creating guaranteed retirement income streams, or as legacy planning, whereby your monies cannot be put at risk.

I would suggest that you speak to an advisor to understand the finer details of these types of plan. There is no 'one size fits all' plan, but rather, a plan that suit you and your objectives and budget.