A beginner's guide to investment linked plans

 



An investment linked plan (ILP) is a hybrid insurance product that combines life insurance along with an investment component. When buying life insurance, you might have had a friend or two recommend that you look into ILPs. If you are considering doing so, you may want to read this blog first as we give you an overview of what an ILP is.

How do ILPs work?

When you sign up for an ILP, you get a choice between single-premium and regular premiums. The premiums that you pay are used to buy units in sub-funds that can potentially help you earn through their returns. A part of the premiums that you pay will be used for buying life insurance coverage.

You can also switch between funds as your investment goals and risk appetite change. You also get the option of adjusting your life insurance coverage as your needs change. For instance, some insurers allow you to reduce your life insurance coverage all the way down to zero after a certain age (usually around 50 years).

What are some of the benefits of an ILP?

Taking an ILP can hold many advantages for you. Let’s take a look at some of these –



READ MORE: A beginner's guide to investment linked plans.

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