ILP glossary (60 terms, English and Chinese)

A life policy with both insurance and investment components: premiums, after charges, buy units in one or more sub-funds; some units are sold to pay insurance and other charges, and the rest stay invested. There is usually no guaranteed cash value, and the policyholder bears the investment risk (MoneySense).

A fund set up by the insurer that pools policyholders' premiums and invests them in a portfolio of assets; it may be managed by the insurer or by an external fund manager (LIA guide). Under MAS Notice 307, sub-funds follow the investment restrictions of the Code on Collective Investment Schemes and are valued every business day.

The unit of measurement into which a sub-fund is divided. Premiums are converted into units at the unit price and credited to the policy; when charges are deducted, the corresponding units are cancelled at the prevailing price. The account value equals units held multiplied by the unit price, and the number of units changes only through purchases, charges and withdrawals.

The price per unit, calculated as the sub-fund's net asset value divided by the number of units in issue (Notice 307, paragraph 12). Fund-level charges such as the fund management fee are already deducted when the net asset value is calculated, so the unit price is itself a price net of those charges.

Units are bought and sold at the same price, based on net asset value, with no bid-offer spread. Under the LIA industry standard on sub-fund pricing (MU 78/20), all ILPs have used NAV single pricing since 8 October 2021; paragraph 74A of Notice 307 requires insurers to comply with that standard. Earlier policies may still use dual pricing.

The two prices under dual pricing: the offer price is the price at which the policyholder buys units, and the bid price the price at which units are sold, with the offer price the higher of the two. Offer prices do not apply to single-priced policies, and insurers' fund price pages usually say so.

Under dual pricing, the difference between the offer price and the bid price, used to cover distribution, marketing and general administration costs. MoneySense describes it as typically about 5%, and the LIA guide as typically below 5%; ILPs issued from 8 October 2021 no longer use it.

Transactions are carried out at the unit price from the next valuation after the instruction is submitted, not at the price already published when it is submitted. Most ILPs use forward pricing (LIA guide), so the dealing price is not known in advance when buying, redeeming or switching.

The total market value of all units in the policy at current prices. It moves with sub-fund performance and falls as insurance and other charges are deducted. When the account value reaches zero the policy terminates; it is not a guaranteed amount.

The amount actually payable on surrender, generally the account value less any applicable surrender charge and policy debt. ILPs usually have no guaranteed cash value, and the surrender value changes with unit prices (MoneySense).

An ILP paid for with one lump-sum premium. MoneySense notes that most single-premium ILPs provide less insurance cover than regular-premium ILPs. Since 2001 CPFIS has accepted only single-premium ILPs, and insurance bought with SRS funds is also limited to single-premium products.

An ILP paid for with regular premiums — monthly, quarterly, half-yearly or yearly — in effect regular investing within a policy structure. There is usually a premium-charge period or surrender-charge period, and stopping premiums may trigger a premium holiday, a bonus clawback or a risk of lapse.

An option to pay regularly in the form of a series of single premiums, which the LIA guide calls "recurring single premium options" (LIA documents abbreviate this as RSP; this site does not use the abbreviation, to avoid confusion with regular savings plans). Under the illustration rules, recurrent single-premium ILPs are treated in the same way as single-premium ILPs.

Premiums paid in addition to the basic premium to buy more units. For most single-premium policies and top-ups, 100% of the premium buys units (MoneySense), but some products may still charge on top-ups; refer to the Product Summary.

An ILP focused on investment, with very thin cover. "101 ILP" is market shorthand for a policy whose death benefit is roughly the higher of 101% of premiums paid and the account value. The formula is only one common approach, not a regulatory definition; refer to the Product Summary.

An ILP with a separate sum assured whose main purpose is protection; the death benefit is paid according to a contractual formula combining the sum assured and the account value, and insurance charges make up a larger share of costs. LIA's threshold for treating a single-premium ILP as protection-oriented is death and critical illness benefits together of at least 150% of the single premium.

A charging structure in which a "premium charge" is deducted from premiums in the early years and only the balance buys units. The LIA guide's example deducts 85%, 70% and 50% in years 1–3 respectively, and 0 from year 4; the example figures are not a market standard.

A structure in which 100% of premiums buy units from the first premium, but a surrender charge applies on surrender or withdrawal in the early years. The LIA guide's example deducts 90%, 60% and 20% in years 1–3 respectively, and notes that front-end and back-end structures have a broadly similar overall effect on charges.

An arrangement to suspend premiums on a regular-premium ILP. The LIA guide notes that during a premium holiday the insurer still sells existing units to pay insurance and other charges; on some products bonus units may also be clawed back or forfeited as a result.

Selling units held in one sub-fund and buying units in another. Most insurers offer a limited number of free switches a year, with a charge thereafter (LIA guide, MoneySense); switches are also dealt at forward prices.

Selling some units to take cash while the policy stays in force. A withdrawal reduces the account value and usually also the death benefit, may incur a charge during the surrender-charge period, and may affect eligibility for bonus units.

Bringing a portfolio back to its target allocation, through fund switches or changes to the premium allocation, when the actual weights of the sub-funds drift away from target. Some products offer automatic rebalancing; rebalancing is a way of controlling risk and does not ensure higher returns.

Investing a fixed amount at regular intervals, so that more units are bought when prices are low and fewer when they are high, averaging out the purchase cost and reducing the effect of market timing. It does not ensure a profit and offers no protection in a market that keeps falling.

The policy terminates and cover ends when the value of units in the account is not enough to pay insurance and other charges. LIA requires policy illustrations to state this possibility and to note that topping up premiums can prevent lapse.

A rider attached to an ILP, such as critical illness or disability cover, whose premium is not paid separately but by selling units each month. It speeds up the consumption of units in the account, especially during a premium holiday or a market fall.

The uniform term for up-front deductions, other than insurance charges, on ILPs issued from 8 October 2021. Paragraphs 27A and 27B of MAS Notice 307 require these deductions to be combined and disclosed as a single "premium charge".

A term used in older policies for the share of premiums used to buy units. An allocation rate of 20% means only S$200 of a S$1,000 premium buys units (MoneySense example). ILPs issued from 8 October 2021 may no longer use the term (Notice 307, paragraph 27B).

The charge for death and other cover, calculated on the sum at risk, age, gender and smoking status; it usually rises with age and is paid by selling units. If claims keep rising, the insurer can raise it for a whole class of policies up to the maximum stated in the contract (LIA guide).

An annual fee paid to the sub-fund manager, charged as a percentage of net asset value. It is already deducted when the unit price is calculated, so policyholders do not see a separate deduction. Actual rates are as stated in the Product Summary and the PHS.

A measure of a sub-fund's annual operating expenses as a percentage of average net asset value, calculated under IMAS guidelines. Under Appendix A of Notice 307, the calculation excludes insurance charges, transaction costs, performance fees, foreign exchange gains and losses, front-end and back-end loads on buying and selling other funds, and withholding tax.

A measure of how often a sub-fund trades: the lesser of purchases and sales during the period, divided by average net asset value (Notice 307, Appendix A). The higher the turnover ratio, the higher the transaction costs not captured in the expense ratio tend to be.

A fixed monthly or annual charge for administering the policy, usually paid by selling units. MoneySense lists it as one of the common ILP charges; whether it is guaranteed or can be adjusted depends on the policy contract.

A charge levied when some or all units are sold within a set period (MoneySense), common in back-end-charging structures. There is no standard rate or period; refer to the charge table in the Product Summary.

A fee charged on each fund switch once the free switches have been used, either a fixed amount or a percentage of the amount switched. The number of free switches and how the fee is charged are set out in the Product Summary.

Welcome bonuses, loyalty bonuses or premium bonuses that some regular-premium ILPs pay as extra units, usually subject to conditions on the premium term, premium band and no withdrawals; they may be clawed back on a premium holiday or withdrawal. Bonus units are not investment returns.

A one-off charge on the amount invested when buying a fund or policy. From 1 October 2020 the CPF Board removed sales charges on unit trusts and investment-linked insurance products under CPFIS (CPF Annex D, Mar 2022).

An annual fee that a fund platform's wrap account charges on the market value of holdings. Under CPFIS the wrap fee is capped at 0.4% a year (CPF Annex D, Mar 2022), applying only to unit trusts held through CPFIS investment administrators.

One of the mandatory disclosure documents for an ILP (Notice 307, Appendix A), setting out the policy structure, charges, sub-funds, pricing method (including whether single pricing applies) and risks. It is the first document to check for charges and the death-benefit formula.

A document summarising a product's key features and risks in a concise format. Notice 307 requires a PHS for each ILP sub-fund; on 15 May 2026 MAS decided that ILPs will in future need a standardised PHS, with the start date to be set by legislation.

A document showing a policy's future value at assumed rates of return. Where it applies, an ILP illustration shows three rates of return, one of them 0%, with the other two currently capped at 8% and 4% (subject to the latest LIA circulars); all are assumptions before fund management charges, neither floors nor expected returns, and the illustration must state that the policy value may fall to zero. Since 1 February 2014, investment-focused single-premium ILPs no longer provide one.

The process by which an adviser, before recommending a product, gathers the client's financial position, goals, time horizon and risk tolerance and analyses their needs. It is the basis for assessing suitability; clients can choose not to provide information, but the basis for any recommendation is then limited.

The policy statement the insurer sends periodically, showing the number of units, unit prices, account value and details of charges. For "specified ILPs" such as regular-premium ILPs it is sent at least once a year, within 30 days of the policy anniversary; other ILPs receive one monthly (Notice 307).

Periodic reports the insurer prepares on each sub-fund, which must be sent to policyholders within two months and three months of the end of the reporting period respectively (Notice 307, paragraph 36). They cover holdings, performance, the expense ratio and other details, and may be provided electronically.

The period of 14 days from receipt of the policy documents during which the policy can be cancelled (MoneySense). ILP refunds are adjusted for changes in investment value, with most insurers paying the lower of premiums paid and the investment value, less medical examination and other costs (LIA guide).

The amount the policy pays on the death of the life assured, calculated according to the contractual formula. Investment-oriented ILPs commonly pay the higher of a percentage of premiums paid (such as 101%) and the account value; protection-oriented ILPs combine the sum assured and the account value. In both cases the policy contract prevails.

Surrendering or reducing an existing policy while taking out a new one. It may bring a new round of up-front charges, fresh underwriting and insurance charges at an older age; MAS Notice 318 and other rules set disclosure requirements for replacing life policies, as stated in the current provisions.

The MAS notice on ILPs issued under the Insurance Act, containing mandatory requirements (Part I) and non-mandatory standards (Part II) covering disclosure, investment guidelines, borrowing limits and operational practices, and applying to licensed direct insurers carrying on life business. The current version was revised on 28 June 2021.

An assessment that intermediaries have had to carry out since 1 January 2012 before recommending unlisted Specified Investment Products (including ILPs) to retail customers, to determine whether the customer has the knowledge or experience to understand the product's risks. Those who do not pass but still wish to buy must receive advice (MAS, 28 Jul 2011).

A category in the MAS classification framework for investment products. On 15 May 2026 MAS decided to classify ILPs as complex products, with investors to be alerted before a transaction; "selected clients" must still receive financial advice. Legislative amendments will be consulted on separately and the start date has not been set.

A client as defined in the current FAA-N16 (from 29 December 2025, paragraphs 10A–10D) who meets any two of three criteria: aged 62 or above, not proficient in English, and educational attainment below GCE O or N level. Such clients must be accompanied by a trusted individual (which can be waived in writing) and receive a call-back before the transaction is completed. MAS's 2026 complex-product framework keeps this definition.

The remuneration framework for advisers set out in MAS Notice FAA-N20, which links representatives' variable pay to non-sales indicators (such as understanding of needs, suitability of recommendations and disclosure) and requires independent sales audits. It was last revised on 29 December 2025.

A scheme administered by the Singapore Deposit Insurance Corporation (SDIC) that protects guaranteed benefits if an insurer fails: aggregate guaranteed sums assured are capped at S$500,000, and guaranteed surrender values at S$100,000 per life assured per insurer. ILP benefits directly linked to sub-fund net asset values are not protected.

An independent body that handles disputes between consumers and financial institutions. Mediation has no monetary limit, and adjudication is capped at S$150,000 per claim (for claims filed from 1 July 2024); claims must be filed within six months of the firm's final reply, and awards are binding on the financial institution.

A scheme allowing members to invest OA savings above S$20,000 and SA savings above S$40,000 in included products. ILPs must be single-premium (since January 2001), sales charges were removed from 1 October 2020, and sub-funds are subject to expense-ratio caps (CPF Board).

A questionnaire that members investing under CPFIS for the first time have had to complete since 1 October 2018, to help them understand the basic risks of investing and whether investing suits them. It differs from the CKA in the sales process: the two serve different purposes and are administered by different parties.

A voluntary government retirement savings scheme in which contributions attract tax relief and funds can be invested in shares, unit trusts and restricted life insurance products. Only 50% of withdrawals made after the statutory retirement age is taxable, while premature withdrawals are fully taxable and attract a 5% penalty (IRAS, 3 Sep 2026).

The risk categories (lower, low to medium, medium to high, higher) that the CPF Board assigns to every ILP sub-fund included under CPFIS, used to decide whether SA savings can be invested and which expense-ratio cap applies. The LIA guide separately gives suggested holding periods by fund type.

A platform on which investors or advisers buy and sell unit trusts, ETFs, bonds and other products in one place; a wrap account charges an annual fee on the market value of holdings and usually includes switching and rebalancing services. Holdings on a platform are capital markets products, not insurance policies, and fall outside the PPF Scheme.

A feeder fund invests most of its assets in another fund (the underlying fund). Many ILP sub-funds invest in unit trusts on a feeder basis, in which case charges may sit at two levels, and the Product Summary should disclose the name and manager of the underlying fund.

The Hong Kong term for investment-linked insurance. Insurers are regulated by the Insurance Authority (IA), products and offering documents must be authorised by the Securities and Futures Commission (SFC), and sales through banks are supervised by the Hong Kong Monetary Authority (HKMA) (IFEC, 20 Feb 2023). Differences between the two markets are covered at vul.hk.