What are investment-linked policies and what is a good amount to allocate to it if I am interested to buy?

Investment-Linked policies are investment plans that include life insurance coverage. They can be classified into two categories:

1) Traditional Investment-Linked Policy - your premiums go into both investment and insurance plans. 2) Pure Investment-Linked Policy - your premium will be 100% invested into funds You can find out more information here.

A general rule of thumb is to keep your insurance/investment products to around 10% of your income.

Whether an ILP is suitable for you is dependent on your personal financial situation and goals - Do get in touch if you require more information​​​

Generally, investment-linked policies are offered by the respective insurers in Singapore. Accordingly, it allows you to invest into the offered investment-linked sub-funds while getting insurance coverage.

In terms of insurance coverage, there are plans that are protection based. To put it another way, the focus of such plans is on insuring you for life's major events. At the same time, your premium is invested into the sub-funds for potentially higher return.

On the other hand, there are plans that are focused on investment. In this situation, there is not much insurance coverage since we don't really need it in this case. Accordingly, the premium allocation should start at 100% from the first year and potentially increase over time. Furthermore, there should be limited charges since our emphasis is on growing yoir pot of wealth.

Depending on your needs, a general guideline will be 10% to 20% of your monthly income on healthcare and life insurance, and 20% to 30% on savings and investment.

Here is a Guide:

Understanding Your Personal Cash Flow

I will suggest for you to speak with an experienced consultant to evaluate your situation with you before we determine whether an investment-linked policy is suitable.

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