Investment-Linked Insurance Policy (ILP)

An investment-linked insurance policy is considered to be the most complex and riskiest insurance policies one can purchase. When it comes to life insurance, investment-linked insurance policy serve dual purposes which are protection and investment.  By investing in the program, one is guaranteed of protection as well as wealth building which is crucial for retirement. Ideally, there are two categories of ILP namely; single premiums and regular premiums. The latter allows you to pay premiums on a regular basis usually in installments. Single premiums gives one the liberty to pay premiums in lump sum. Primarily, single premiums offer less insurance protection as compared to regular premiums.

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To compliment your investment style, the ILP offer an opportunity to choose from a variety of sub funds to boost your investment worth. Investment-linked insurance provides a combination of investment and protection creating an all-round program for the potential investors. It offers a solution to those thorn in between venturing in investment and insurance in their endeavors. Investors have the liberty to choose the amount of money to invest towards protection as well as investment. Varying amounts of premium payments, maintaining the living standards after retirement, accessibility to different types of funds are some of the reasons why investors are seeking to pool money into the program.

Just like other investment options, the policy also has investment risks associated with it. The fluctuation of the movement of the unit price makes it difficult to choose between single premium and regular premium plans. There is also the possibility of getting less returns than what you had initially invested. To avoid the risks, it is paramount to use the analysis of the past performances in order to make substantial decisions in the fire regarding choosing the investment-insurance linked program policy. Unlike other insurance related policies, the ILP does not guarantee cash value returns. Essentially, the value of the ILP programs largely depends on the performance of the sub funds.

There is more exposure in the ILP as compared to other insurance products hence more consumers prefer to venture in. Information about Medicare Advantage plan options can be found at Before choosing sub funds, it is crucial to understand the strategy, approach and the potential risks posed by each sub-funds. In as much as the program may seem to be attractive to consumers, there is need to make comparisons with other insurance and investment products. The choice of the sub-funds offered by the ILP programs ought to be in line with your investment objectives and portfolio.