Plan Well

PLAN WELL

Our Guide on Investment-Linked Plans

3 mins read

So, you’ve got all your insurance needs locked down. Let’s take a quick checklist:

Medical card:
checked!

Life protection:
checked!

Investment-Linked Plans: What You Need to Know
An investment-linked plan combines the security of insurance protection with the potential growth of investments. This hybrid approach allows you to choose from a variety of investment funds that align with your risk tolerance, giving you the opportunity to see your money grow. Before you decide if this is the right plan for you, let’s learn what it's all about: 

Investment-linked plan vs. life insurance plan. What’s the difference?

VS.

Life Insurance plan

Life insurance offers a safety net for your loved ones, providing a financial payout to your dependents if the unexpected occurs.

Investment-linked plan

In contrast, an investment-linked plan offers flexibility. You can withdraw a portion of your account value to meet your financial needs during your coverage period, while still ensuring your dependents receive a payout if the unexpected occurs.

How does an investment-linked plan work?

An investment-linked plan has two purposes for its insurance premium:

One portion goes into insurance protection

Another portion goes into investment funds

Three important questions to ask before calling your agent

You should aim to use dollar-cost averaging for your long-term 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. That's where our Investment Fund Manager comes in. They can help you achieve your investment goals by leveraging their expertise and managing your funds effectively.

The average return on an investment-linked plan differs based on the level of risk and aggressiveness of the funds you invest in.

The primary purpose of a life insurance policy 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?

Investment-linked plans offer a unique combination of protection and investment, along with these additional advantages:

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
In addition to your existing Death and Total and Permanent Disability benefits, you can enhance your coverage with add-ons like medical, critical illness, accidental, and hospital income protection

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 the premium will go towards maintaining your coverage, reducing the premium that goes into investment funds.

Explore your options to determine the best mix of premiums for your needs.

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.