Features and risks

Product features

You should read the offering documents (including the Product Key Facts Statement) and the Important Facts Statement to understand the features and risks of any ILAS product you are considering. Generally speaking, ILAS products have the following features and risks:

  • As policy value (and if applicable, death benefit) is subject to investment risks and market fluctuations, it may be significantly less than the premiums paid or not sufficient to meet your insurance needs. Irrespective of the assumed rate of return shown in the illustration document, the actual return could fluctuate significantly or even become negative (ie losses). You should not rely upon the assumed investment return in making investment decisions.
  • Due to various fees and charges levied by the insurance company on the ILAS product, the overall return on the ILAS may be lower than that of direct investments in the underlying/reference funds.
  • Fees charged upfront may reduce the amount of premium made available for investment, especially in the early policy years.  In some cases, such fees could be significant. 
  • You may be entitled to a loyalty or special bonus if you meet certain conditions, such as maintaining the policy for a number of years.   
  • Product issuers may have sole discretion under the contract to determine the investment returns of certain ILAS policies, and may apply a downward/negative market value adjustment.
  • Some ILAS products offer multiple death benefit options for consumers to choose from.  Insurance charges may be levied on some of these options and may increase significantly during the policy term due to the age of the insured and reduce the amount that may be made available for investment.
  • In general, ILAS products offer you a range of investment options to choose from and allow you to switch between these options where switching charges may be applicable. These investment options are linked to underlying/reference funds. But any investments made by the insurance company in the underlying/reference funds belong to the insurance company, not you. You only own the ILAS policy.
  • The investment options available under an ILAS product can have very different features and risk profiles. You should read the offering documents of the ILAS product and the underlying/reference funds involved for details of the underlying/reference funds (including their investment objectives and policies, risk factors and charges, etc.).