The 15-point checklist before buying an ILP

This checklist sets out 15 questions to get written answers to before you sign for an investment-linked policy (ILP), with a note on which document each answer is usually found in and the warning signs that should make you stop. It draws on the LIA's guide to investment-linked policies (Mar 2026), the documents required under MAS Notice 307 and MoneySense guidance. It does not judge whether any particular policy is good; it simply helps you confirm that you know what you are buying.

How to use the checklist: five documents and three kinds of answer

The key information about an ILP is spread across five documents (Notice 307; LIA guide).

As you go through each item, every answer will be in one of three states: found in the documents and understood; explained verbally by the adviser but not found in the documents; or no answer. In the second and third cases, ask for a written explanation before you sign.

Group 1: purpose and suitability (items 1–3)

1. What is my purpose in buying this policy, and do I really need the insurance component?

Write down the goal first: pure protection, pure investment, or both. If you only want protection, term life may be more direct; if you only want investment, buying unit trusts directly removes a layer of policy charges. Where to find the answer: the needs and basis for recommendation in the FNA. Red flag: the goal recorded in the FNA does not match your real goal.

2. How long can this money stay invested, and does that match the sub-funds' suggested holding period?

The LIA guide's minimum suggested holding periods are ten years or more for equity and regional or country-specific funds, and four years or more for balanced and bond funds (Mar 2026). For a regular-premium ILP, also consider whether you can keep paying. Where to find the answer: the risk category in the PHS and the premium term in the Product Summary. Red flag: money needed within a few years is placed in equity sub-funds.

3. Has a financial needs analysis and a Customer Knowledge Assessment (CKA) been done, and what was the result?

Since 1 January 2012 a CKA has been required before an ILP is recommended; those who do not pass can still buy, but the adviser must provide advice (MAS, 28 Jul 2011). Selected clients must be accompanied by a trusted individual (which can be waived in writing) and receive a call-back before the transaction is completed (Notice FAA-N16, revised 29 Dec 2025). Where to find the answer: copies of the FNA and the CKA record. Red flag: you are advised to skip the FNA, or someone fills in the CKA for you.

Group 2: structure and cover (items 4–6)

4. What type of ILP is this, and was it issued before or after 8 October 2021?

Confirm whether it is single or regular premium, front-end or back-end charging, and investment- or protection-oriented. The issue date determines how charges are described: for policies issued from 8 October 2021, front-end deductions must be called a "premium charge" (Notice 307, paragraphs 27A and 27B), and single pricing applies under the LIA industry standard. Where to find the answer: the first page and the charge table of the Product Summary. The differences between the two types are explained in 101 ILPs and protection ILPs.

5. How is the death benefit calculated, and how does it change after a partial withdrawal?

One common approach for investment-oriented ILPs is the higher of 101% of premiums paid and the account value (the so-called 101 ILP), while protection ILPs set a separate sum assured; in published product examples, a partial withdrawal reduces the death-benefit base by 101% of the amount withdrawn (refer to the Product Summary). Where to find the answer: the death benefit section of the Product Summary and the policy contract. Red flag: the death benefit is described as "capital protected" or "guaranteed to return your capital".

6. How do insurance charges change with age, and can the insurer raise them?

Insurance charges usually rise with age and are paid by selling units (MoneySense, 28 Sep 2026); if claims keep rising, the insurer can raise them up to the contractual maximum, for a whole class of policies (LIA guide). Where to find the answer: the insurance charge table in the Product Summary and the charge adjustment clause in the policy contract.

Group 3: charges (items 7–9)

7. How many years does the premium charge or surrender charge last, and how much is it each year?

Front-end or back-end charges are concentrated in the early years (see the LIA example in ILP charges). The figures for your policy are those in the Product Summary; copy them down year by year. Where to find the answer: the charge table in the Product Summary, and the "effect of deductions" column in the policy illustration (if provided).

8. What are the sub-funds' expense ratios and turnover ratios?

The expense ratio is a fund-level charge and excludes insurance charges, transaction costs and performance fees (Notice 307, Appendix A). A public benchmark is the expense-ratio cap that CPFIS sets for included sub-funds (CPF Board, Mar 2022); see Buying an ILP with CPF or SRS. Where to find the answer: the PHS and the fund charges section of the Product Summary.

9. Are there bonus units, and what conditions are attached?

Some regular-premium ILPs offer welcome bonuses, loyalty bonuses or premium bonuses in the form of extra units, usually subject to conditions on the premium term, premium band and no withdrawals, and they may be clawed back. Bonus units are not investment returns. Where to find the answer: the bonus terms in the Product Summary. Red flag: bonuses are compared as if they were a rate of return.

Group 4: sub-funds and scenarios (items 10–13)

10. Who manages each sub-fund, what does it invest in and which risk category is it in?

The LIA guide suggests asking about the type of sub-fund, its track record, its main risks and charges, and who the fund manager is. Where to find the answer: the PHS for each sub-fund. Past performance does not indicate future results.

11. Can I switch sub-funds, how many free switches are there each year, and is there automatic rebalancing?

Most insurers offer a limited number of free switches each year, with a charge thereafter; some products offer automatic rebalancing. Where to find the answer: the switching terms in the Product Summary. How rebalancing works is covered in Regular investing and rebalancing.

12. What does the 0% column of the policy illustration show, and if there is no illustration, why not?

Since 1 February 2014, single-premium and recurrent single-premium ILPs generally do not come with a policy illustration, with an exception for protection-oriented policies (where death and critical illness benefits together exceed 150% of the single premium); illustrations must include a 0% column and state that the policy value may fall to zero and the policy terminate (LIA). The other two columns are illustrative caps, neither floors nor expected returns. Figures to check: in the 0% column, the year in which the account value falls below premiums paid, and whether a lapse year appears.

13. What happens if I stop paying or take a premium holiday?

The policy does not end during a premium holiday, but units continue to be sold to pay insurance charges and other charges, and taking the holiday may itself incur a fee (LIA guide). Where to find the answer: the premium holiday clauses in the Product Summary and the policy contract. Red flag: a premium holiday is described as a "free pause".

Group 5: after-sales and protection (items 14–15)

14. How much do I get back if I cancel during the free-look period, and what is protected if the insurer fails?

The free-look period is 14 days from receipt of the policy documents (MoneySense, 11 May 2026), and ILP refunds are mostly the lower of premiums paid and the investment value, less costs (LIA guide); the PPF Scheme does not cover ILP benefits directly linked to sub-fund net asset values (SDIC). Regulatory details are in ILP regulation.

15. Who is the adviser, which firm do they represent, and who do I go to if there is a dispute?

Check the adviser's name and firm against the Register of Representatives and the Financial Institutions Directory on the MAS website, and confirm which insurer's product is being recommended. A dispute should first be raised in writing with the insurer; if it is not resolved, you can file with FIDReC within six months of the firm's final reply, free of charge.

Red flags: stop if any of these happen

1. Any verbal claim of "capital protection", "guaranteed to return your capital" or "you can't lose" that has no matching guarantee in the policy terms.
2. The higher or lower illustrative rate in the policy illustration is presented as an expected return, or the 0% column is avoided.
3. You are advised to use money needed within a few years, or emergency funds, to buy a regular-premium ILP.
4. You are advised to surrender or replace an existing policy without a written explanation of the costs and losses of switching (paragraph 44 of Notice FAA-N16 requires written disclosure of switching costs).
5. You are asked to sign on the spot, without time to read the Product Summary and the PHS.
6. The adviser cannot explain the basis for the recommendation in the FNA, or someone else answers the CKA for you.

Printable version: the 15 items at a glance

Once you have completed the checklist, you can follow the next steps in The application process. If you would like this interpreted for your own circumstances, you can register your needs through the contact options on this site.