Compare investment-linked insurance policies (ILPs) and other policies with cash value, such as participating whole life and endowment policies.
- ILPs and participating life insurance policies both have investment components.
- ILPs do not have any guaranteed cash value, while participating policies have a portion that is guaranteed.
- With ILPs, you bear all the investment risk.
Both investment-linked insurance policies (ILPs) and other life insurance policies with cash value, such as participating whole life and endowment policies, have investment components.
However, there are important differences between the two. Use this table to compare the two types:
- Insurers may choose to smoothen bonuses to avoid large fluctuations in bonus declared year on year.
- This means that the returns from your policy will not necessarily track the ups and downs of investment markets.
ILPs | Participating whole life and endowment plans | |
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Investment mandate |
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Bonuses |
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Returns track the ups and downs of investment markets? |
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Cash value |
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Are cash values guaranteed? |
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Investment risk |
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Premium Breakdown |
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Guide to types of life insurance
Life insurance: Comparing term and bundled products Understanding term insurance Understanding whole life insurance Understanding endowment insurance Participating versus non-participating policies Understanding investment-linked insurance policies Investment-linked policies: Guide to fees and pricing Investment-linked versus participating life insurance policies Understanding annuities