Smart tips before purchase


Smart tips if you are thinking of buying an investment-linked assurance scheme product (ILAS):

  1. An ILAS is a long-term investment-cum-life insurance product. Be aware of its long-term features e.g. upfront charges, early surrender or withdrawal penalties and loyalty bonuses (if you meet certain conditions).
  2. The policy value (and if applicable, death benefit (Note 1)) is subject to investment risks and market fluctuations. The return of an ILAS may vary substantially or even become negative (ie losses).
  3. Understand the fees and charges which may reduce the amount available for investment.  You should always compare the overall cost of an ILAS product with buying life insurance cover and investing in the same selected funds separately.
  4. Buying an ILAS is different from investing in a fund (Note 2). With an ILAS product, you are buying a life insurance policy, not the underlying assets.
  5. In general, ILAS are designed for consumers with the dual objective of investment and estate planning as they are a packaged product that includes both investment and insurance elements. ILAS products are not suitable for people with short- or medium-term liquidity needs.
  6. Your intermediary should disclose to you through the Important Facts Statement (IFS) about intermediary remuneration. You should ask your intermediary before taking up your ILAS policy to know more about the remuneration that your intermediary will receive in respect of your ILAS policy. If you are not satisfied with or do not fully understand the information provided, then you should consider carefully whether it is appropriate for you to buy the ILAS product or whether you should buy the ILAS product through that intermediary.
  7. Check the offering documents (including the Product Key Facts Statement) and the IFS carefully and understand the product key features and risks. You will be asked to confirm you understand and agree with the information provided when you sign the IFS.

Note 1: "Death benefit" means the lump sum payable to the beneficiary if the life insured dies.
Note 2: "Funds" can be set up in various forms such as mutual funds and unit trusts.