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You can find broadly three types of ILAS products in terms of the level of life insurance protection currently available in the retail market: “high protection”, “capital preservation upon death” and “pure 105”.

Key features of different types of ILAS products in terms of protection level:

Type of ILAS products Death benefits Level of life insurance protection Customer groups Points to note
High protection High level of death benefits (ie death benefits can be many times of the premiums paid, especially in the case of death during early policy years) High
  • Customers with limited resources but need to have high death benefit for the designated beneficiary(ies); and can use resources for investment at the same time.
  • Provide designated beneficiary(ies) with high death benefits protection immediately.
  • Surrender/premium charges are high.
  • Surrender value could be zero in first year, gradually increasing with policy years.
Capital preservation upon death Death benefits in the form of capital protection (ie higher of 100%/105% of total premium paid or 105% of account value) Medium
  • Customers wanting to invest, but at the same time wish to leave the paid premium as the death benefit for the designated beneficiary(ies) (ie in case of death of the policyholder, the beneficiary(ies) can at least get back the total premium paid, or 105% of the account value, whichever is the higher).
  • Death benefit in the early policy years is low, especially in the case of regular premium payment ILAS, since the gross premium paid is low.
Pure 105 105% of account value Low
  • Customers looking for higher level of investment, and yet wish to designate the investments in this account to the designated beneficiary(ies).
  • Death benefit can be very low when performance of the underlying investments of the ILAS is poor.