Endowment & ILP
Investment-Linked Policy (ILP)
An insurance policy where your premiums buy units in investment sub-funds, so the value rises and falls with markets and there are no guarantees.
MAS Customer Knowledge Assessment
This is a Specified Investment Product (SIP).
MAS requires brokers and financial institutions to run a Customer Knowledge Assessment (CKA) before opening retail access to SIPs. The CKA checks three things: relevant education, work experience in finance, and past trading history in investment products.
Clients who do not pass can still access non-complex products (deposits, plain SGS, plain SGX-listed shares, and most plain unit trusts and ETFs). To unlock SIP access later, ask your broker about the next steps, including any required learning modules that satisfy the assessment.
What it is
In plain language.
An ILP packages life insurance and investing into one contract. Part of each premium pays for insurance charges and policy fees, the rest buys units in sub-funds you choose, equities, bonds, balanced, or multi-asset. There is no guaranteed maturity value, the policy is worth whatever your units are worth.
There are two broad shapes. A protection-focused ILP carries a meaningful death benefit, and insurance charges rise with age, which can eat heavily into the fund value in later years. An investment-focused or '101' ILP carries only minimal cover (often 101 percent of the account value) and is marketed mainly as a wrapped investment with regular or single premiums.
Crucially, an ILP is not the only way, often not the cheapest way, to get either the insurance or the investing it bundles. The same exposure can usually be assembled separately with term insurance plus a low-cost fund platform.
How it works
In Singapore, in practice.
You buy from a life insurer through an agent, bank or platform. Charges to understand include the bid-offer spread, an annual fund management charge on each sub-fund, a policy or administration fee, and mortality / insurance charges that are deducted by cancelling units monthly. For protection-focused ILPs these mortality charges escalate sharply with age.
MAS requires a Cover Page and a Product Highlights Sheet that disclose fees and the effect of deductions, plus a free-look period (a minimum of 14 days) during which you can cancel and recover premiums less certain costs. In 2025 MAS consulted on classifying ILPs as complex products and standardising an ILP Product Highlights Sheet to make fees and exit terms clearer for newly sold products; these enhancements are being phased in.
Regular-premium ILPs often have low or zero allocation to units in the first year or two (high distribution cost), so surrendering early can mean getting back far less than you paid. Read the illustration's 'effect of deductions' table, it shows in dollars how much cost is removed over the life of the policy.
Run the numbers
See it in your own figures.
See what investing a fixed amount here every month could grow to, at an illustrative return.
What regular investing could grow to
Investing a fixed amount every month, compounding at an illustrative return. Projected, not guaranteed.
Where it sits
Its place in the instrument map.
A sound plan is built in layers, from a guaranteed base up to small, high-risk satellites. This is the role Investment-Linked Policy (ILP) plays, and the layers around it.
Small, high-risk positions you could afford to lose entirely.
Direct stocks and REITs held for long-run growth.
Funds, ETFs, and bonds that spread risk across many holdings.
Government-backed income and the SRS tax wrapper.
Guaranteed and liquid: your CPF base and emergency cash sit here.
The trade-offs
What it does well, and what to watch.
Good for
- People who specifically want investment exposure and some life cover inside one policy and understand the layered fees
- Investors who value the ability to switch between the insurer's sub-funds without a separate platform
- Those who will hold for the long term so that front-loaded distribution costs are spread thin
Watch outs
- Fees stack up: bid-offer spread, fund charge, policy fee, and age-rising insurance charges, total cost is often far higher than a term plan plus a low-cost fund
- Mortality charges on protection-focused ILPs climb steeply with age and can erode or even exhaust the fund value in later years if premiums are not maintained
- There is no guaranteed value, market falls hit you directly with no insurer smoothing
- Early surrender frequently returns much less than premiums paid; treat it as a long-term lock-in, not flexible savings
- Bundling makes it hard to compare cost and performance against alternatives, the protection-versus-savings trade-off is opaque by design
In the market
What this looks like.
Real Singapore examples, shown to make the instrument concrete. These are illustrative, not endorsements.
How it connects
Instruments that work with this.
Participating Endowment Plan
A fixed-term insurance savings plan that pays out a lump sum at maturity, blending a small guaranteed amount with non-guaranteed bonuses.
Full breakdown Endowment & ILPParticipating Whole Life Plan
A lifelong par policy that builds a guaranteed-plus-bonus cash value while keeping a death benefit, often pitched as both protection and a long-term savings asset.
Full breakdownSources
Where the facts come from.
- ILPs combine insurance and investment; units can fall in value and there is no guaranteed return. MAS requires a Product Highlights Sheet and a free-look period of at least 14 days.https://www.moneysense.gov.sg/articles/investment-linked-insurance-policies-ilps
- In 2025 MAS consulted on enhancements to investment-linked product disclosure, including classifying ILPs as complex products and standardising the ILP Product Highlights Sheet.https://www.mas.gov.sg/
See where Investment-Linked Policy (ILP) fits your own plan.
This is educational, not advice. When you want a detailed look at how this fits your situation, a licensed adviser will map it to your income, CPF, and goals.