What are the options available when considering investment-linked insurance, and which one should I consider? I am a 20 year old who is just starting to learn more about insurance? - Seedly
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Khor Kiat Siong

Asked on 29 Oct 2020

What are the options available when considering investment-linked insurance, and which one should I consider? I am a 20 year old who is just starting to learn more about insurance?

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    Hello Kiat Siong, welcome to Seedly! For ILPs, you should consider Funds that are:

    The time horizon is the time you think you need to put the money in and take the money out. There are many different names for the funds so be sure to ask your agent about which of the category above it is in.

    This is from the M9 textbook for insurance agents. As a 20 year old though, I would strongly advise against ILPs for now because of it's high cost. I suggest that you look at other investment products like ETFs (a great passive investing tool) before you decide again.

    Good Luck!​​​

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    Investing Curator
    Investing Curator

    29 Nov 2020

    Don't do ILP. There is simply too many layers of fee. Your agent takes a huge chunk, your agent's company takes another bite of the pie, the bank your agent's company opens the position with has a share too. You're practically left with crumbs after. Listen to Wei Yi, ETF is a good start.
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    I strongly urge you to reconsider getting an ilp, the fees are insanely high and you're better off with other investment vehicles at a much lower fee.

    fees eat into your returns, and just do a quick google to find out and read the many articles on why you should not get an ilp

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    Investment-linked Insurance Policy (ILP) is an insurance policy that combines life insurance coverage with an investment component. When you buy an ILP, your premium will be used for two purposes - purchasing life insurance overage and paying for units in one or more ILP sub-funds.

    As your returns are based on the performance of the sub-fund(s), it is important to choose your financial advisor to understand more about your portfolio of sub-funds. Ideally, your portfolio should be well-diversified with good long term performance projection. There should also be an acceptable risk level.

    You can arrange a free financial portfolio review with us to help us provide a recommendation that is best suited to your needs.

    To find out more about the pros and cons of ILP, do check out our guide for ILP.

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