Details of Investment-Linked Assurance Scheme

Investment-Linked Assurance Scheme (ILAS)

 

Introduction

Investment-linked assurance scheme (ILAS) is a life insurance product with investment elements, providing the policyholder with investment options and life coverage. Different ILAS products provide different levels of life coverage, and the death benefit may be less than the total premium paid. Customers who purchase ILAS bear investment risk associated with the product, as the account value is dependent on the investment return which is subject to market fluctuations. In general ILAS is suitable for those who have a long-term investment or an estate planning purpose, as high withdrawal charges can be incurred if the policy is surrendered early. To provide a better understanding of ILAS, 10Life summarises information of the key fact sheets and key values from different ILAS products in the market.

 

Assumptions

The death benefit and surrender value may be dependent on factors including but not limited to:

1)    Size of Premium

2)    Fees

3)    Gender

4)    Issue Age

5)    Smoking Status

6)    Payment Terms

 

Key Items

To compare among different products under the same standard, the below items are considered:

1)    Payment Term

-          It is the premium payment period of the basic premium.

 

2)    Minimum Investment

-          It is the minimum investment requirement for the premium.

 

3)    Fund Switching Fees

-          The policyholder has the right to switch among different funds and fund switching fees may be charged by the insurer.

 

4)    Number of Fund Providers

-          It is the number of unique fund companies that provide fund choices in a specific product.

 

5)    Number of Investment Options

-          It is the number of total fund choices in a specific product.

 

6)    Projected Death Benefit Ratio

-          It is equal to the projected death benefit divided by the premium paid. It considers the net rate of return as the investment performance may affect the value of death benefit.

-          Assumed net rate of returns of 0%, 3%, 6% and 9% per annum.

 

7)    Projected Surrender Value Ratio

-          It is equal to the projected surrender value divided by premium paid. It considers the net rate of return as the investment performance will affect the value of surrender value.

-          Assumed net rate of returns of 0%, 3%, 6% and 9% per annum.

8)    Total Fees and Charges Disclosure (TFCD)

-          Listing out fees payable when dealing in the fund units, including subscription fee, switching fee and redemption fee. Please note that the TFCD is calculated based on the different assumptions. For example, the insured is a non-smoking 40-year-old male; an assumed rate of return of 3% per annum throughout 20 years; there is no early withdrawal / termination of your ILAS policy.

 

9)    Death Benefit

-          A death benefit is a pay-out to the beneficiary when the insured dies.

-          Protection Level can be either:

i)              Capital preservation upon death

§  Capital protection for death benefit, generally the higher of total premium paid or account value; or

ii)             Pure 105%

§  105% of account value

 

10)  Period with Surrender Charge

-          There will be a withdrawal charge of the policy account value in case of policy surrender within the surrender charge period.

 

Important:

All investment involves some degree of risk. Most of the products do not have any guarantee on the repayment of principal. You may not get back the full amount of premium you paid and may suffer investment losses.

 

10Life hereby excludes any liability arising from using the information and will not make warranty or guarantee on the accuracy, completeness and timeliness of the information or for any claims and / or losses caused thereby. You should seek independent professional advice and review the insurance product information carefully before purchasing any insurance products. The information shown in the communications placed on 10Life does not constitute an offer or solicitation for the purchase or sale of any banking or insurance products or services. If you have any questions or suggestions on the methodology, please email us at enquiries@10Life.com.

 

Updated on 6 September 2021

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