From time to time, people might ask: why should I buy an investment-linked products instead of the traditional whole life products?
Here are some of the reasons:
1) It could be cheaper- If you are still young, you might realise that a traditional whole-life products usually are more expensive than the investment-linked products. The reason is because whole-life policies are generally having level-premiums, which means the premiums are the same throughout your life. However, although you might pay the same premium for your investment-linked products, the "Risk Charge" that the insurance company will deduct from your investment account is getting greater as you age. Therefore, if you purchase an investment-linked product at young age, highly likely that you will be able to get one with cheaper price.
2) Flexibility : You get to have premium holiday. Premium holiday is when you stop paying premium but still enjoy the life coverage. Be mindful that, it will only work if your investment account has enough money to cover for the monthly "Risk Charge" that the company will deduct from the account.
3) Choice of Investment: You get the flexibility to choose your desired investment funds according to your risk preference.
4) You get to change the policy benefits later on: You have the flexibility to change the coverage whenever you want as long as it satisfy certain criteria. You may add or remove rides, do top-ups, withdraw the available fund balance to a certain extent etc.
5) Transparency: The allocation of your premium is detailed out clearly in your policy contract. You even get to know how much commission your agent is getting.
6) Attachable with medical plan: You can attach a medical plan to your basic investment-linked products.
Here are some of the reasons:
1) It could be cheaper- If you are still young, you might realise that a traditional whole-life products usually are more expensive than the investment-linked products. The reason is because whole-life policies are generally having level-premiums, which means the premiums are the same throughout your life. However, although you might pay the same premium for your investment-linked products, the "Risk Charge" that the insurance company will deduct from your investment account is getting greater as you age. Therefore, if you purchase an investment-linked product at young age, highly likely that you will be able to get one with cheaper price.
2) Flexibility : You get to have premium holiday. Premium holiday is when you stop paying premium but still enjoy the life coverage. Be mindful that, it will only work if your investment account has enough money to cover for the monthly "Risk Charge" that the company will deduct from the account.
3) Choice of Investment: You get the flexibility to choose your desired investment funds according to your risk preference.
4) You get to change the policy benefits later on: You have the flexibility to change the coverage whenever you want as long as it satisfy certain criteria. You may add or remove rides, do top-ups, withdraw the available fund balance to a certain extent etc.
5) Transparency: The allocation of your premium is detailed out clearly in your policy contract. You even get to know how much commission your agent is getting.
6) Attachable with medical plan: You can attach a medical plan to your basic investment-linked products.