What are your views on investment linked plans and endowment plans? Should I have one?

My opinion is to have both but if you want to choose, ask yourself whether you are a risk taker or not.

Non-risk taker: Endowment plans have guaranteed amount. Returns is around 3.25% and above.

Risk taker: Investment plans do not any guaranteed amount but they can have a higher returns compared to endowment plans. Investment plan are still safe as it is using a dollar cost averaging method so that at the end of the day, you may get a positive ROI.

All in all, both plans is a long term commitment.

Hi there!

Whether you should have an ILP or endowment plan will depend on your overall objective. The basic rule of thumb is: the higher the risk, the higher your potential returns.

The returns from endowment plans usually depend largely on their non-guaranteed returns, therefore there are some risks involved - albeit very little. ILPs are typically riskier than endowment plans, however the overall risk will depend on what you're putting your money in (eg. fixed income funds are less risky than equity funds, but they generate lower returns).

Therefore, if you're willing to take a higher risk, ILPs certainly have the potential to grow your money over a shorter period of time than endowment plans. However, if you're only looking for short-term returns (less than 10 years), you're probably better off learning how to trade stocks and options.

Some good questions to ask yourself before deciding:

1) Are you looking for medium (eg. 10-15 years) or long-term (eg. 30-40 years) returns? Are you saving for your children's education or planning for retirement?

2) How much risk are you willing to take for the amount of returns you want?

If you are looking to invest in specific funds from a company, check their fund factsheets and have a look at their fund size and growth rate. It will usually give you a good idea about how stable the fund is. Also remember that time in the market is more important than timing the market. No matter which plan you decide to go for, only buy one if you are ready for a long-term commitment (usually at least 10 years).

I hope my answer helped. If you have anymore questions regarding this or want some recommendations for such plans, please feel free to let me know. I will be very happy to assist. Thank you!