How ILPs Can Help In Reaching Your Financial Goals
When buying an investment linked plan, it is extremely critical that you ask yourself questions like “What is it that I aim to achieve out of my investment in an insurance plan?” or “Do I like choices and flexibility in a plan?”. There are people who would want to give priority to growing their savings for rainy days, while others may simply want to protect their family with an insurance coverage against what is unknown. Hence, if you are considering investing in an investment linked policy, you should also bear in mind certain factors like wealth goals and the viability of a policy to make sure it does not disrupt other financial commitments.
What is an investment linked plan (ILP)? An investment linked plan has both life insurance and investment components. The ILPs come in two forms: The one where you pay single premium by paying a lump-sum once The one where you pay regular premiums on a monthly basis Irrespective of your financial goals, the premiums in these policies are used to buy units in one or more investment-linked funds that you select. How do ILPs work? Typically, investment in ILPs is targeted towards fulfilling two purposes: To provide coverage against the unforeseen: The ILPs focused on providing protection, offering coverage against death, total or permanent disability and terminal illnesses. To accumulate wealth: The units in an investment linked policy focused on wealth accumulation are set aside for investment purposes to aid you in growing your wealth.
Are ILPs suitable for me? Some people invest in ILPs since these plans allow the flexibility to control the extent of coverage at different stages of life and the potential returns that you get on investments of selected funds. If any point in time, you find it difficult to pay your premium; you can adjust your coverage. ILPs are ideal for people with long-term to medium-term coverage goals, making them coveted by young professionals and families with young kids who have more time to grow their wealth and outlast the market fluctuations. Benefits of ILPs: The benefits of investing in an investment linked policy are many. Some of them are as follows: Flexibility: ILPs are one of the best policies when it comes to flexibility of adjusting the extent of your coverage. At those stages of your life like marriage or having a baby, your responsibilities continue to multiply along with your liabilities. Hence, you have the option to grow your sum assured for better coverage for your loved ones. Loyalty Bonuses: This kind of bonus is issued at stipulated intervals and is meant to enhance the value of ILP. This bonus helps since it contributes to higher partial withdrawals in case you make them.
Premium Holidays: ILPs offer premium holidays wherein you can take a break from paying the monthly premiums without the entire policy getting lapsed, in case you need funds for exigent conditions. During this span of time, the policy will carry on selling units from the sub funds to maintain the insurance component. It is important to note that not paying the premiums will impact the value of your policy since new premiums are being invested at the time of premium holiday. Need to know more about investing in an investment linked plan? Get in touch with a professional financial consultant today! You can even visit our Social sites: Facebook:- https://www.facebook.com/PrudentialSingapore/ Linkedin:- https://www.linkedin.com/company/prudential-assurance-company-singapore/ Youtube:- https://www.youtube.com/channel/UCWs_Qg2Rahok4kORir5w4eQ Instagram:- https://www.instagram.com/prudentialsingapore/?hl=en
THANK YOU