Should I buy an investment-linked plan given that I have plans to invest?

We should not buy structured products of this kind, when we do not

comprehend them to the fullest.

Instead think of passive indexing ETFs, try to reas a lot.

some of my thinking here:

https://seedly.sg/questions/what-is-your-genera...

You said yourself. Your intent is to invest. So an ILP is not suitable.

ILP is a bundled product comprising (i) protection (insurance) and (ii) investment components. In traditional insurance which also contain the protection and investment components, the insurance company will basically break the premium you pay into the two components. The protection component usually is small compared to the investment component. This is because insurance companies tend to ramp up the investment component. Why? One possible reason is the commission sales structure, salespeople will generally prefer higher premium products to sell - simply because of the higher commissions they will earn. In the case of traditional insurance, the insurer will have to invest the investment (or savings) component - to generate returns for the policyholder. But often the insurer can only invest mostly in conservative investments such as bonds because of the long term nature of insurance policies and capital-based regulations. This is not ideal typically for a young person who has a long-time runway.

In the case of the ILP, the insurer essentially "outsources" the investment burden to a third party manager(s). The sum assured will also depend on the performance of the investments.
The key question is whether the traditional insurance product or the ILP is suitable for a person. The clue is that most ILP holders treat it like an investment. But an ILP is an insurance product. So there is an element of mis-selling here if the client treats it as an investment. The key factor is that unlike normal investments, you cannot simply liquidate or exit the investments in an ILP - because you will also lapse the insurance component. Statistically, you are less insurable with time. This poses the dilemma of re-insurability. It is far better and more flexible to BUY TERM & INVEST THE REST. No need to bundle. You can enjoy your protection at lower charges and cost while having full flexibility to invest. ILPs came about more due to tax benefits where such premiums can be tax-deductible. In Singapore, there is no such benefit. In short, ILPs are not ideal.

If you're planning to start investing, there're many options and different asset classes to invest in. Investing via an investment-linked plan is not the only way. Some of the other options you might wanna look at are:

• Robo-Advisor Wars: StashAway vs AutoWealth vs Smartly vs MoneyOwl vs EndowUs
• Regular Shares Savings Plan: DBS vs OCBC vs PhillipCapital

Together with an investment-linked plan, consider the pros and cons among the above-mentioned options and see which one or more of the following you would like to start investing with.

I hope this helps.

Hi there,

I would not mix investments with insurance. Strictly keep them seperate. Make sure you have adequate coverage first prior to investing.

On the investment front, take some time to think about what is it that you want to achieve with your investments. There are a lot of asset classes out there and it will be good for you to learn about them first before planning. Sit down with an advisor that you can trust to plug any gaps in understand that you may have before you begin.

All the best!