Investment-Linked Policies / Education

Questions to Ask Before Buying an ILP in Singapore

Educational article

This article is generic financial education based on public sources. It is not a product recommendation or personal financial advice.

Quick answer

Before buying an investment-linked policy (ILP) in Singapore, ask how much of each premium is actually invested, which insurance and policy charges apply, what the sub-fund fees are, whether returns or cash values are guaranteed, what surrender charges apply, and what happens if you reduce or stop premiums. The answers should be checked against the Product Highlights Sheet, Product Summary and Policy Contract rather than relying only on a sales explanation.

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Written by

Danny Chua

Financial Consultant · Representing Prudential Assurance Company Singapore (Pte) Limited

MAS Representative Number CCS300848890 · BSc. Pharm. Sci.

Published 2026-08-16 · Updated 2026-08-30

What should I ask before buying an ILP in Singapore?

Use the policy documents to answer these questions before deciding whether an ILP fits your objectives, finances and need for insurance. The Product Highlights Sheet, Product Summary and Policy Contract should show the actual terms, fees and risks for the specific policy.

Premium allocation and charges

What percentage of each premium is used to buy units in the first few years?
What insurance coverage charges are deducted, and can those charges increase with age?
What policy or administration charges apply?
What fund management fees, bid-offer spreads or switching charges apply to the selected sub-funds?

MoneySense notes that not all premiums may be used to buy units and that ILP charges can include insurance, administration, fund-management and surrender charges.

Insurance cover and investment risk

What life or other insurance benefits does the policy provide, and what exclusions or conditions apply?
Which benefits, if any, are guaranteed and which values depend on sub-fund performance?
What happens if the policy value becomes insufficient to meet insurance charges?

ILP investment returns are not guaranteed, and the policyholder bears the investment risk of the sub-funds.

Surrender, withdrawals and premium changes

What surrender charges apply, and during which years?
What is the current illustrated or projected surrender value at important milestones, and what part of it is guaranteed, if any?
Are partial withdrawals allowed, and can a withdrawal affect the remaining insurance cover or policy sustainability?
What happens if I reduce, pause or stop premiums?

Suitability and alternatives

Why is this ILP being proposed for my objectives, time horizon, protection needs, liquidity needs and ability to bear losses, and what alternatives were considered?

A personalised recommendation should follow a proper assessment of your financial situation, needs and objectives. There is no single ILP structure that is suitable for everyone.

If any charge, surrender condition or risk remains unclear, ask for it to be shown in the official product documents before committing.

Key Takeaways

Check premium allocation, insurance charges, policy fees and fund-management fees in the official product documents.
ILP investment returns and cash values are generally not guaranteed and depend on sub-fund performance after charges.
Ask specifically about surrender charges, partial withdrawals and what happens if premiums are reduced or stopped.
A personalised ILP recommendation should be tied to your objectives, finances, protection needs, time horizon and ability to bear losses.

Sources

Understanding investment-linked insurance policies - MoneySense (accessed 2026-08-30)
Investment-linked policies: Guide to fees and pricing - MoneySense (accessed 2026-08-30)
Financial advisory process - MoneySense (accessed 2026-08-30)

About Danny

Danny Chua is a Financial Consultant Representing Prudential Assurance Company Singapore (Pte) Limited. MAS Representative Number CCS300848890. Qualification: BSc. Pharm. Sci.. Read more about Danny.

Related Guidance

Prudential Assurance Company Singapore (Pte) Limited (PACS) is the insurer referred to in this disclaimer. Investment products are subject to investment risks including the possible loss of the principal amount invested. The figures stated relating to PACS products are for illustrative purposes only. The information presented is for your information only and does not consider specific investment objectives, financial situation or needs of any person. We recommend that you seek advice from a PACS Financial Consultant before making a commitment to purchase a Prudential policy.

This advertisement has not been reviewed by the Monetary Authority of Singapore. Investment products are subject to investment risks including the possible loss of the principal amount invested. The information presented is for your information only and does not consider specific investment objectives, financial situation or needs of any person. Seek advice from a Prudential Financial Consultant before making a commitment. This is Danny Chua's personal professional website and is not Prudential's official corporate website.