OffShore ILPs: What You Need to Know
Investment-Linked Plans (or ILPs as commonly known) are not new in Singapore. What’s relatively new is that offshore providers have been entering the local market to pedal their goods alongside familiar names such as Prulink, Manulink etc (usually ILP has a ‘-link’ as suffix in the product).
Who are some of these offshore life insurance firms? They include the following:
- Zurich International Life
- Friends Provident International
- Royal Skandia
As highlighted in an earlier post on ILPs (premium allocation), do note the fees and charges associated with ILPs. In the following table is a snapshot of the fees and charges of some popular offshore regular premium ILPs side-by-side with Aviva Global Savings Account (being a similar investment offering).
Regular Premium Plan | Zurich Vista | FP Global Wealth Builder | Aviva Global Savings Account |
Portfolio Management Fee | 0.75% per annum applied on portfolio NAV deducted monthly | 1.2% per annum fully embedded in fund NAV | 0.38% per quarter applied on portfolio NAV deducted quarterly |
Fee applied on Initial 18mths of Units throughout Policy Term | 4% per annum applied on 1st 18mths Initial Units deducted monthly | 1.50% per quarter applied on 1st 18mths Initial Units deducted quarterly | 1.12% per quarter applied on 1st 18mths Initial Units deducted quarterly |
Policy Fee | fixed $12 pm | fixed $9 pm | fixed $11 pm |
Mirror Fund Fee | 0.75% mirror fund fee | 1.20% feeder fund fee | nil |
Bonus Allocation | Bonus allocation on 1st 12mths based on premium & invest term (min 10yrs) | Bonus allocation on 1st 18mths based on premium & invest term (min 10yrs) | Bonus allocation on 1st 18mths based on premium (min 10yrs) & Loyalty Bonus (min 15yrs) |
Partial withdrawals attract no penalty but early surrender imposes a penalty. Therefore, when considering these plans as part of regular investment savings, it is important to take note of liquidity concerns whilst planning ahead.
The underlying funds include fund managers such as ThreadNeedle, Invesco and Collin Stewart. These brand names are not usually found in the Singapore retail fund market and may interest some looking out for additional choice in terms of international fund managers.
On a personal note, with regard to regular investment savings, I would most likely stick with traditional RSP plans on funds if I had to choose amongst these options. Balance of liquidity, cost and underlying fund performance. Then again, to each his own but just be informed.
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