Comparison between various insurance policies

There are a variety of life insurance products designed to meet different needs. Compare the types below to find a type of life insurance with the features and characteristics you’re looking for.

Term Life Insurance

Whole Life Insurance

Universal Life Insurance

Variable Universal Life Insurance

Death benefit Yes Yes Yes Yes

Designed for low cost

Yes

Access to your money1

Yes Yes Yes

Guaranteed cash value

Yes Yes

Market participation

Yes

Tax advantages Yes Yes Yes Yes

Flexible payments2

Yes Yes

What is the difference between an ILP and other life insurance policies?

The key differences between ILPs and other life insurance policies, such as participating whole life and endowment policies and term insurance policies, are summarised in the following table:

ILPs Whole Life, Endowment & Term Plans

Investment Mandate Part of your premiums is invested in units in your chosen sub-fund. Returns are directly linked to the value of the underlying assets.

You can track the sub-fund’s performance via the daily publication of unit prices.

For participating policies, all of your premiums go into the insurer’s participating fund. The insurer decides the investment objective and approach for the fund taking into account the insurer’s overall liabilities.

The fund’s performance depends on its investment performance, claims experience and expense levels of the fund.

Term insurance policies do not provide investment returns.

ILPs Whole Life, Endowment & Term Plans

Bonuses There are no bonuses. The ILP’s value depends on the performance of your chosen sub-funds.

For participating whole life and endowment policies, bonuses depend on the performance of the fund. They are not guaranteed, but once declared by the insurer, they become vested and are guaranteed.

Non-par and term policies do not pay bonuses.

Returns from policy track the ups and downs of investment markets?

Yes, the returns are directly linked to the value of the assets in the sub-funds.

For participating whole life and endowment policies, the smoothening of bonuses means that the returns from your policy will not necessarily track the ups and downs of investment markets

ILPs Whole Life, Endowment & Term Plans

Assets of policyholders identifiable?

Assets for each ILP policyholder are identifiable in the form of units held.

Assets of participating policyholders are maintained at the fund level.

Cash Value You may withdraw the cash value of the units allocated to you, subject to possible surrender charges. Early termination of the policy may be costly and the cash value payable may be less than the total premiums paid.

Whole life and endowment policies build up cash value after a few years. Early termination of the policy may be costly and the cash value payable may be less than the total premiums paid.

Term insurance policies do not have any cash value.

ILPs Whole Life, Endowment & Term Plans

Are cash values guaranteed? No, cash values depend upon the value of the sub-fund’s units and are usually not guaranteed.

A part of the cash values under a participating policy will be guaranteed.

Investment Risk The investment risk is borne entirely by you.

There are two categories of benefits – those which have been declared and are guaranteed and non-guaranteed benefits. For guaranteed benefits, the insurer bears the investment risk. But non-guaranteed benefits (i.e. potential benefits arising in the future) depend on how the insurer’s participating fund performs.

Premium Breakdown The amount of the premium used for insurance coverage, charges and buying units are unbundled and transparent. They are disclosed in the Product Summary, Benefit Illustration and Policy Contract.

The amount of premium used for insurance coverage, charges and investment are bundled. They are not separately identified in the Product Summary and Policy Contract.