Smart tips before purchasing an ILAS product

ILAS
Investment
Insurance

Smart tips if you are thinking of buying an Investment-Linked Assurance Scheme (ILAS) product:

  1. An ILAS is a long-term investment-cum-life insurance product that only suitable for investors who are prepared to hold it for a long term period. Be aware of its long-term features e.g. upfront charges, early surrender or withdrawal penalties and loyalty bonuses (if you meet certain conditions).
  2. Check the “Things to know before you invest” section of the Product Key Facts Statement (KFS) where the insurance company will indicate the expected minimum holding period of the ILAS policy. If you are not prepared to hold the ILAS policy longer than the indicated minimum period, it may not be suitable to you. You should consider if there are other comparable alternative products (e.g. buying a life insurance policy and invest in funds via an asset-based fund platform separately) that may better suit your needs.
  3. The policy value (and if applicable, death benefit for some ILAS policies) is subject to investment risks and market fluctuations. The return of an ILAS product may vary substantially or even become negative (i.e. losses).
  4. Understand the fees and charges which may reduce the amount available for investment. Make good use of the total policy charges illustration in the KFS which gives you a full picture of the fees and charges at policy level and may help you make comparison across different ILAS products.
  5. Buying an ILAS product is different from investing in a fund. With an ILAS product, you are buying a life insurance policy, not the underlying assets.
  6. Your intermediary should disclose to you through the Important Facts Statement (IFS) about intermediary remuneration. You should ask your intermediary before taking up your ILAS policy to know more about the remuneration that your intermediary will receive in respect of your ILAS policy. If you are not satisfied with or do not fully understand the information provided, you should consider carefully whether it is appropriate for you to buy the ILAS product or whether you should buy the ILAS product through that intermediary.
  7. Check the offering documents (including the KFS) and the IFS carefully and understand the product key features and risks. You will be asked to confirm your understanding and agreement to the information provided when you sign the IFS.
  8. Think carefully about your own circumstances and the reason why you want to get an ILAS policy, among other things,
    • whether the nature and features of the ILAS product and insurance cover will be suitable for and adequate in meeting your needs;
    • whether the ILAS' policy term (and the expected minimum holding period) aligns with your investment horizon;
    • whether you are able or intend to make contributions for the whole of your chosen premium term particularly if the ILAS policy you choose has regular premium payment obligations;
    • whether the fees and charges are acceptable especially if you may need to surrender the policy earl
  1. If you are considering appointing an intermediary to provide any service advising on, or choosing, or managing or switching investment options available under your ILAS policy (“Advisory Service”), please be aware and take note the following:
    • The provision of such Advisory Service is not a part of the ILAS product features, the related service fees do not form part of the total policy charges of an ILAS and are not reflected in the total policy charges illustration in the ILAS KFS;
    • When considering engaging an intermediary for an Advisory Service, you should ask the intermediary about the fees for Advisory Service. The amount and basis of calculation for the Advisory Service fees payable to the intermediary, along with the frequency with which they are payable, should be clearly disclosed to you on an ongoing basis. You should factor into your considerations these Advisory Service fees as they are additional fees separated from the total policy charges illustrated in the ILAS KFS; and
    • The Advisory Service arrangements are optional and you should be allowed to terminate such service at any time.