Investment-linked policies are a controversial topic when it comes to financial planning. Many of its detractors believe investment and insurance should be kept separate, for they are individual products serving very different purposes.
Like any investment or financial product, ILPs have their positives and negatives. That said, let’s delve into the pros and cons of getting an ILP. Like any other financial investment product, an ILP carries investment risk, which does not provide guaranteed returns. That means the value of your investments will fluctuate according to market conditions, and you may incur losses if you choose to surrender your policy ahead of maturity.
A key selling point of ILPs is its ability to generate potential substantial returns. It could be used as a tool to generate potential passive income for one’s future investment goals. For example, a working parent may purchase an ILP with a 20-year investment period as a way to provide for his child’s education. He can make withdrawals on the ILP to fund his child’s university fees.
On the other hand, you can reduce your insurance coverage by choosing to hold more units in your chosen ILP sub-funds. With an ILP, you can also increase your insurance coverage without having to switch to a new policy. But this applies mostly to ILPs with a stronger protection component, not ILPs that focus on wealth accumulation.
AWA offers three types of bonuses that are given according to the Minimum Investment Period selected, namely the Start-up Bonus, the Power-up Bonus and the Loyalty Bonus. These bonuses not only boost the value of your ILP, but it also helps to offset some of the costs of maintaining an ILP and assist in preserving your investments during bearish conditions.
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Fuente: ChannelNewsAsia - 🏆 6. / 66 Leer más »