How investment-linked plans help you reach your goals

When it comes to buying life insurance, you have many important choices to make.  Ask yourself questions like “What do I look out for when purchasing an insurance plan?”  and “Do I value choices and flexibility in a plan?” Some people may prioritise growing their savings for rainy days, while others may want to safeguard their family with insurance coverage against the unforeseen.  If you are looking to buy life insurance, you should also consider important factors such as your wealth goals and the affordability of a policy to ensure that it does not jeopardise other financial commitments.  

What is an investment-linked plan (ILP)?

Here’s what you need to know about investment-linked plans (ILPs) that can help fulfil your protection needs or financial goals Regardless of which need or goal you are pursuing, the premiums in these plans are used to purchase units in one or more investment-linked funds of your choice. 

For protection-focused ILPs, the policy focuses on your life protection against Death, or Total and Permanent Disability and Terminal Illness. For wealth-accumulation ILPs, the units in your policy are earmarked for investment purposes to help you grow your wealth.

Are ILPs suitable for me?

Many people value ILPs as these plans give you the flexibility to control the level of insurance coverage at different life stages and the potential of investment returns you can get from the selection of professionally managed funds.  If you are unable to afford your premiums at any time, you can adjust your insurance  coverage. Or go on a premium holiday by taking a temporary break from paying your premiums. During this period, your policy will not be terminated.

ILPs are well-suited for people with medium- to long-term investment horizons, making them attractive to young professionals and families with young children who will have more time to grow their money and ride out market fluctuations. Many who are more established in their careers are also investing in wealth-accumulation ILPs for their retirement saving goals.

What are my options?

In April, Great Eastern launched two new ILPs — GREAT Life Advantage and GREAT Wealth Advantage — to provide customers with the security of life protection and help them build their wealth respectively. Both policies are regular-premium ILPs and customers can make smaller payments monthly. Smaller regular premiums help to keep these policies affordable, especially for those starting out in their careers or raising young families.

GREAT Life Advantage

As a parent, nothing is more important than the security of your child’s future. GREAT Life Advantage helps you to manage commitments and responsibilities, while keeping your loved ones protected, no matter what life throws at you.

Monthly premiums for this plan are as low as $100, with the flexibility of topping up your premium anytime. Under this plan, every child of the life assured receives a Child Cover Benefit of $20,000 at no additional cost to the policyholder. The child is protected against Death, Total and Permanent Disability and Terminal Illness, before he or she turns 18.

You, the life assured, will also be able to increase your insurance coverage to meet your financial needs at eight milestones in life, such as the birth of your child, without having to undergo any medical assessment.

Policyholders have the option of adding on riders for enhanced protection. Enjoy coverage against 53 critical illnesses with the GREAT CriticalCare Advantage Rider. Or purchase the GREAT MultiPay CriticalCare Advantage Rider for more comprehensive coverage against critical illnesses across different stages, Additional Benefit Conditions and excision of benign tumours. Under this rider, policyholders are allowed to make multiple claims of up to three times for critical illnesses at various stages.

Should you want to rebalance your portfolio, the plan also allows you to reduce your protection coverage and increase investment units to maximise financial returns in later years.

GREAT Wealth Advantage

Designed for young professionals, GREAT Wealth Advantage empowers you to grow your wealth by letting you make small, regular contributions to achieve your medium- and long-term goals.  

Monthly premiums are as low as $200, and you will have full flexibility on how you want to invest and manage your portfolio. You can increase your investment by way of single premium top-ups or make partial withdrawals in the future, as well as switch funds and restructure your portfolio, based on your changing career needs. 

Under this plan, the entire sum of your basic regular premiums is used to purchase units in investment-linked funds. Great Eastern will add a Welcome Bonus of an extra five per cent of your first year's basic regular premiums paid to your investment portfolio. Receive an additional Loyalty Bonus of five per cent of your basic regular premiums paid in the form of extra units from the 10th policy year, every time you make a premium payment.  

These bonuses may go a long way in helping you to reach your financial goals quicker, be it buying your first home or a new car. In addition, GREAT Wealth Advantage provides protection against Death, Total and Permanent Disability, and Terminal Illness, with no medical underwriting required and at no additional cost.

Flexibility and customisation

With Great Eastern’s investment-linked plans, you can reap the rewards of life insurance while growing your wealth. Says Mr Colin Chan, managing director of group marketing at Great Eastern: “We specially designed GREAT Life Advantage and GREAT Wealth Advantage for customers who seek flexibility and customisation to meet their budget and evolving needs.

Source: The Sunday Times, Investment Supplement, 7 July 2019