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All You Need To Know About Investment-Linked Plans
3 mins read
Investment-Linked Plans
So, you’ve got all your insurance needs locked down. Let’s take a quick
checklist:
Medical card:
checked!
Life protection:
checked!
Investment-linked plan – what’s that?
Investment-linked plan is a hybrid of insurance
protection and an investment component where you
get to enjoy the possible returns of investing
in various investment funds that suit your risk
appetite. Before you decide if this is the right
plan for you, find out what it is all
about:
Investment-linked plan vs. life insurance plan. What’s the big difference?
VS.
Insurance plan
Life insurance provides a payout of your coverage amount to your dependents if the unexpected happen to you.
Investment-linked plan
Investment-linked plan, on the other hand, allows you to withdraw some of your account value for your financial needs during your coverage period on top of the payout to your dependents if the unexpected happen to you.
How does an investment-linked plan work?
An investment-linked plan has two purposes for its premium:
One portion goes into insurance protection
Another portion goes into investment funds
Three important questions to ask before calling your agent
You want to achieve dollar-cost-average
effectiveness over the long run in your
investment. You can choose to invest your funds
in equities by buying your units at a low price
and selling at a high price to maximise your
profits. But in reality, no one knows the right
time to invest. You can leverage on the
expertise of our Investment-Fund Manager to help
you achieve your investment goals.
The primary purpose of life insurance is to
guarantee your source of income, especially in
light of an unexpected event, such as death,
loss of income or physical mobility. With A-InvestLink,
your dependents will be paid a lump sum in the
event of your death or total and permanent
disability.
What are the benefits of an investment-linked plan?
Besides the added advantage of having both protection and investment in one plan, here are some other perks of an investment-linked plan:
Freedom & Flexibility
You have the
freedom to invest more money when you have a
surplus or to withdraw money when you face an
emergency and enjoy the flexibility to switch
your funds at any time to increase your
investment account value, to take advantage of
changes in the market.
Transparency
You get access to all
your transactions clearly and see where your
funds go to. You will also receive a periodic
statement that clearly and precisely list all
the transactions such as insurance charges,
investment value and fund unit price.
Low insurance charges
The younger you
are when you purchase your investment-linked
plan, the lower the premium. This benefit
applies to fresh graduates or first-jobbers.
All-in-one benefits
On top of your
existing Death and Total and Permanent
Disability benefits, you can increase or widen
your protection needs by purchasing add-ons such
as medical, critical illnesses, accidental and
hospital income needs.
You are in control of your investment
risk.
A common misconception is that
the investment-linked plan is risky because the
returns depend on the fund performance of the
market. But, you have complete control over your
investments risk by selecting which fund to
invest in and when to switch between
funds.
The Investment-linked plan offers first time and
veteran investors a platform to invest and
receive protection at the same time. The
flexibility and availability to control your
insurance coverage and investment growth are
reasons why an investment-linked plan is a
popular choice.
Do bear in mind that investment-linked plans do not guarantee a fixed growth. As you grow in age, a bigger portion of premium will go towards maintaining your coverage, reducing the premium that goes into investment funds.
Evaluate your options to find out what is the best mix of premium for you.
The above articles are intended for informational purposes only. AIA accepts no responsibility
for loss which may arise from reliance on information contained in the articles.
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