5 Terms You Should Be Aware Of Before Buying An Investment Linked Policy In Singapore Life starts to look a little more peaceful and better when you have it all figured out financially for the future. Today in recent times, where everything seems uncertain, it is critical that you have got yourself covered for the future. One of the best ways to do that is to invest in investment linked policies. An investment linked policy is a hybrid policy that clubs both life protection and investments into one policy. In this policy, the premiums are used to pay for units in one or more sub-funds of your choice. A fraction of these units are then sold to buy insurance while the rest of them remain invested. The policyholders also have the space to adjust their coverage so as to scale their investment nest egg in the later years. This can come in useful particularly for those who want to reduce their life coverage, especially after their children are no longer financially dependent on them.
Since there are many variants of investment linked insurance policies, it is imperative to be aware of the policy-related terms. Here’s a detailed description of them: 1. Single Premium vs. Regular Premiums There are two ways by which you can pay the premiums for ILPs. You can pay for them through regular premiums or through a single premium. For those who opt to pay a single premium, it implies paying a lump-sum at the start of the policy and part of it will go in purchasing units in a sub-fund (i.e. the investment component). These units will be sold on a regular basis to pay for