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3 Best Investment-Linked Plan or 101 Wrappers in Singapore 2023

Investment-linked Insurance Plans (ILP) provides you with the opportunity to leverage the gains in the financial markets and provide life insurance coverage to take care of your loved ones. In this article, we present some investment-linked plans or “101 Wrapper” that may help you meet your investment and savings objectives.

However, before we begin, we would like to address the social stigma of ILPs in general.

This is not a recommendation, Moneyline.SG is not an Exempt Financial Adviser and act only as an information portal. Please seek advice from a licensed financial advisor or leave your contact details below for a proper fact find by a licensed practitioner before making any decision. All information provided are public and can be found directly on the providers website or via any financial representatives that represents the product provider.

Are ILPs bad?

There is no straight forward answer to this because Investment-Linked Plans by itself is a category of life insurance products. By implying ILP is bad, is similar to saying “universal life insurance is bad”, or “whole life insurance is a scam”, or “buying term life insurance is a waste of money”

The notion of ILP came about when people were unhappy with par fund returns of life insurance policies and wanted more flexibility and control. Therefore, Insurance companies decide to give people more flexibility. The biggest problem with ILP is that the cost of insurance rises steeply in the later years of the insured’s life. Thus, if the cost of insurance continuously supersedes the returns of the underlying investments each year, the cash value may actually deplete to a stage where one may eventually lose their coverage even as they continue to pay their premium diligently.

More recently, we are starting to see the emergence of a different type of ILP which is primarily marketed as an investment product by agents, bankers and financial advisors. They are typically known as the “101 wrapper”; such plans provide a death coverage of 101% of the total premiums paid, or in other words, not much insurance coverage. Technically, such a plan does not entirely mix investments with insurance but provides a value-added preposition of capital guaranteed upon the insured’s death regardless if the price of the investments drops below the principal.

Principal Guaranteed, Upon Death

As stated above, one of the main benefit of this product is the provision of death coverage whereby your principal will be guaranteed upon your death and not while you are alive and decides to terminate it after or within the policy term.

Cost Efficiencies

This may come as a surprise, as investment-linked insurance products are often criticized for high platform charges, in addition to fund management and insurance fees. However, this article highlights plans that are cost efficient (low breakeven yield), with the inclusion of start-up and loyalty bonuses to offset costs. These plans may prove to be more cost-effective than a pure investment or robo-advisory platform over a certain holding period.

Locked Up Portion

One must take note that such plans requires a part of your investments, usually termed as “Initial Unit Allocation” to be locked up for a selected number of years. These monies cannot be withdrawn unless you wish to surrender or terminate the policy.

We select the 3 Best Investment-Linked Insurance/101 Wrapper Plans base on 3 basic criteria:

  • Provision of start-up and loyalty bonuses
  • Access to Accredited Investor Funds
  • Low Breakeven Yield

Best Investment-Linked Plan for Low Long Term Breakeven Yield

life insurance singapore

HSBC Life – Wealth Harvest
Primary Charges

Account Maintenance Fee – 3.5% p.a. First 11 years, Afterwards No Charges

Charges exclude fund management fees, and early surrender fees and other partial withdrawal fees.

Few things to take note

HSBC Life’s Wealth Harvest plan, formerly known as AXA Wealth Harvest, is a cost-efficient insurance-linked investment (ILP) option in the long term. The key feature of this plan is that the annual maintenance fee, regardless of the funds selected, is only charged monthly at a rate of 3.5% per annum for the first 11 years of the policy term. After that, there are no maintenance fees. Additionally, the plan does not include a death benefit guarantee on the principal, so there are no insurance costs that will impact future fund returns. To offset costs, HSBC Life offers a 35% upfront start-up bonus and a loyalty bonus of 0.15% from the 10th year to the end of the policy term. It also includes an option to transfer the life assurance to the policyholder’s spouse or children under 18 years old.

What we like
  1. Dividend pay-out option – If dividend funds are selected, the HSBC Life Wealth Harvest allows you to choose whether to receive dividends in cash or to reinvest them. This flexibility can provide you with additional liquidity and allow you to access funds in case of an emergency without incurring any additional charges.
  2. Access to Accredited Investors Funds – The HSBC Life Welath Harvest allows retail investors to access Accredited Investor (A.I) Funds such as Fundsmith SICAV. Such funds are not accessible regardless of platforms for retail investors.
  3. Low Breakeven Yield – The absence of maintenance fees from the 12th year makes this plan a cost-effective long-term investment, and policyholders can reap even greater benefits by transferring the plan to their dependents later on.
  4. Life Replacement Option – gives you the flexibility to transfer your plan to your spouse or child for legacy planning
What we don’t like
  1. No Principal Guaranteed Upon Death – One of the key benefits of insurance-linked investments (ILPs) is the guarantee of the principal amount upon the insured’s death. However, this feature is not offered in this plan.
  2. Lack of Flexibility – the plan lacks flexibility in the first 11 years as stopping premium payments for any reason other than death will result in a surrender penalty.

Best Investment-Linked Plan for Low Short Term Breakeven Yield

Etiqa Insurance

Etiqa Invest Builder
Primary Charges

Policy Charges – 2.3% p.a. (deducted monthly as long as policy is inforced)

Charges exclude fund management fees, cost of insurance, and early surrender fees and other partial withdrawal fees.

Few things to take note

The Etiqa Investbuilder offers a Minimum Investment Period (MIP) of 3, 5, or 10-20 years. During the MIP, the policy must be continuously paid and in effect. The plan does offer a premium holiday option for up to 12 months or waives the early encashment charge in the event of hospitalization, critical illness, retrenchment, or total permanent disability (TPD). Dividends will be paid out if dividend-paying funds are selected as part of the portfolio and the policyholder has chosen to receive dividends.


What we like
  1. Generous loyalty bonuses and low breakeven yields – The policy’s loyalty bonus of 2% per year from the 11th policy year, plus additional bonuses from the 6th to 10th policy years, significantly reduce policy charges and breakeven yields
  2. Life replacement option – The Etiqa Investbuilder offers the flexibility of replacing the policyholder with a spouse or child. This feature allows you to pass on the benefits of the policy to a loved one if you are no longer able to make the best use of it.
  3. Access to AI funds and managed portfolios – Retail investors can access AI funds through the Etiqa Investbuilder, which are typically not available to retail investors through other platforms. The plan also offers access to curated portfolio funds based on the individual’s risk profile.
  4. Dividend distribution – Dividends will be distributed to the policyholder within 30 days of the dividend declaration date, subject to a minimum amount of $40, if a dividend-paying fund is chosen.”

What we don’t like

  1. Inflexibility During Premium Payment Term – There is limited flexibility when a 10-20 year premium term is selected. While dividends can be paid out, the principal remains locked in for the full policy term unless there is a life contingency situation
  2. Low Upfront Bonus – While other insurers offer triple-digit upfront bonuses, the Etiqa Investbuilder may not be as generous in this regard. However, its loyalty bonuses more than make up for this and the plan has one of the lowest, if not the lowest, breakeven yields of any investment-linked policy (ILP) plans on the market

Best Investment-Linked Plan with Retrenchment Benefit and Flexibility

Best Investment linked insurance policy

TM #goAffluence
Primary Charges

Initial Charge – 0.85% p.a. (Charged throughout premium payment term for the first 15 years, deducted monthly)

Policy Charge – 1.2% p.a. (Charged on the whole amount including IUA as long as policy is in forced, deducted monthly)

Charges exclude fund management fees, cost of insurance, and early surrender fees and other partial withdrawal fees.

Few things to take note

In today’s uncertain global climate, it can be challenging to know how to invest your money when your own job may be at risk. The saying “buy the dip” is not a matter of whether, but a matter of how, especially when the likelihood of unexpected financial setbacks increases during economic turmoil.

One solution to this problem may be TM #goAffluence. Have you ever thought about how to continue investing when the market is down and you lose your job due to retrenchment?

Comprehensive Write-up

What we like

  1. Premium Flexibility & Liquidity – With the exception of the IUA (Initial Unit Account) which is the first 24 months premium, liquidity of the product begins from the 25th This means you may stop premium payment, make partial withdrawal, take unlimited premium holidays or even reduce your subsequent premiums to the minimum amount without any extra charges. However, this will affect the subsequent loyalty bonuses being allocated to your investment in the long run. Initial and Policy charges will continue to be levied from the funds
  2. Up to 296% upfront Bonuses – When the policy is in force, an initial bonus will be paid out over two policy year from 50% per annum to a max of 148% per annum on the annual premium paid.
  3. Retrenchment Benefit  – Tokio Marine #goAffluence is the first policy to offer premium waivers in the event of retrenchment. If the policy has been in effect for at least 24 months and no premium holidays have been taken, and the policyowner becomes unemployed for at least 30 consecutive days, future regular premiums will be waived for up to 12 months. The premium waivers will begin on the next premium due date after approval of the retrenchment benefit application. In other words, Tokio Marine will pay for your policy for up to 12 months if you are eligible for this retrenchment benefit
  4. Access to Accredited Investors Funds – The TM #goAffluence allows retail investors to access Accredited Investor (A.I) Funds such as Fundsmith SICAV & Baillie Gifford. Such funds are not accessible regardless of platforms for retail investors. This means that as a retail investor, you will cut through the red tapes and be automatically granted access to AI funds through the wrapper functionality of the plan.
  5. Accidental Death and Medical Reimbursement  – If the policyholder dies due to an injury within 180 days of the date of the accident while the policy is in effect and before the policy anniversary on which the policyholder turns age 75, Tokio Marine will pay an accidental death benefit based on the annualized regular premium, up to a maximum of $100,000 and two times the sum assured. This benefit also applies if the policyholder dies in an accident while traveling on any mode of transportation covered under the policy. Tokio Marine also offers medical reimbursement of up to $2,500 per accident for inpatient treatment and up to $500 per accident for outpatient treatment, including chiropractic and traditional Chinese medicine, in the event of an accident.

source tokiomarine

What we don’t like

  1. Initial Account Charges Levied on Total AUM – Initial account charges for most Tokio Marine investment-linked policies (ILPs) are applied during the first few years of premiums. While Tokio Marine #goAffluence has low initial account charges, it’s important for investors to note that these charges are based on the total investment in addition to policy charges unlike its predecessor.
  2. No Immediate Dividend Pay-out – This plan does not allow for immediate receipt of dividends from dividend-paying funds. However, it does offer the flexibility of making partial withdrawals on your investment starting from the 25th month without incurring any early withdrawal fees.

Given these benefits and drawbacks, it’s advisable for you to choose a policy by keeping in mind your long term priorities and considerations. Do note that these plans do not provide principal guaranteed if you were to terminate them halfway or even after the minimum commitment period. Returns from these policies depend on market condition. There are various charges that one should note and should seek clarification from their agents or financial advisors before taking up the products.

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