Major Types of ILAS products

ILAS
Life insurance
Compensation

ILAS products can be broadly classified into high protection ILAS and low protection ILAS in terms of the level of life insurance protection provided. High protection means the ILAS provides a death benefit of at least 150% of total premium payable before the insured reaches age 65. Otherwise, it will be regarded as low protection.

Examples of high protection and low protection ILAS:

Type of ILAS products Category Death benefits Customer groups Points to note
Protection Linked Plan (PLP) High protection ILAS

At least 150% of total premium payable less withdrawals before the insured reaches age 65.

On or after the age of 65, the minimum death benefit should be not less than the higher of (i) 105% of the account value or (ii) total premiums paid less withdrawals.

Customers who want a product with higher level of life insurance protection and to make investment at the same time.

As PLP offers higher level of life insurance protection, the cost of insurance protection will also generally be higher as compared with low protection ILAS.

When the insured reaches the age of 65 (or any ages specified in the offering documents of the PLP), the amount of death benefit may be significantly reduced.

Capital preservation upon death Low protection ILAS Death benefits in the form of capital protection (i.e. higher of 100%/105% of total premium paid less withdrawals or 105% of account value)

Customers who want to invest, but at the same time wish to leave the paid premium as the death benefit for the designated beneficiary(ies) (i.e. 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 in the case of regular premium payment ILAS, since the gross premium paid is low.

Pure 105 Low protection ILAS 105% of account value

Customers who look for investment, and yet wish to designate investments in an insurance policy to the designated beneficiary(ies).

Death benefit can be very low when performance of the ILAS’ underlying investments is poor.