Chuin Ting Weber, CEO and CIO of MoneyOwl, said in an interview: “In addition to insurance companies, investment platforms and banks also offer account opening bonuses, but ILPs offer larger bonuses and longer lock-in periods.” ILP products typically have a lock-in period, also known as the Minimum Investment Period (MIP), which is usually 10 years or longer.

If investors withdraw funds or surrender the policy during this period, additional fees will be incurred. She also mentioned that some ILP products use bonus units as welcome bonuses, which means giving away some shares of related funds.

Investors may still have to bear the fees of these units. As an insurance product that combines investment factors, ILP naturally also has potential investment risks.

Chuin Ting said that most ILPs invest in actively managed unit trust funds, and investment returns depend more on the fund managers who manage the portfolio, but research shows that active funds find it difficult to consistently outperform the market.

The experts interviewed also believe that although ILP products come with life insurance, it does not mean that the protection is sufficient. Some retirees also invest in ILP products, hoping to receive retirement income from fund dividends and leave the remaining funds to the next generation.

Chuin Ting said: “If the value of the underlying investments declines, the retiree’s assets may be depleted before death, and the policy will lapse.” She suggests that retirees should consider using the CPF Lifelong Income Plan (CPF LIFE) as a first layer of income security before exploring more complex or high-risk investment products.

“CPF LIFE provides lifelong protection and is not affected by market fluctuations.”