Invest in Investment-linked Assurance Scheme or funds?
Savings and Investments | March 15, 2023
Different investment products carry different levels of risk. Before making any investment decisions, investors should first understand the characteristics of the investment products, assess their own financial needs, and carefully consider the potential returns and risks involved.
Invest in Investment-linked Assurance Scheme (“ILAS”) or funds?
Investors often face the question of whether to invest in Investment-linked Assurance Scheme or funds directly. Since these two investment categories have a wide range of choices and unique features, you may refer to the following introduction to help you understand the differences between the two.
The features and differences of ILAS and funds
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Investment-linked Assurance Scheme | Fund |
Investment choices |
The insurance company offers various investment options for ILAS policies by selecting different funds for customers to choose from. Please be noted that when purchasing ILAS, customers are obtaining a policy for the ILAS but not the related funds, which are held by the insurance company. |
The types and selection of funds offered by different financial institutions vary. Investors can choose and purchase funds on their own. If you purchase funds directly, you will become the fund holder and have direct ownership of the related funds. |
Fees and charges |
Administrative and policy fees are typically charged for the product, as well as surrender charges when withdrawing money or surrender. Fees vary by insurance companies.
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Under normal circumstances, charges for fund purchases, sales, conversions or other fund transactions (if applicable) will be collected on a transactional basis. |
Contribution options |
Customers can choose to pay their premiums on a monthly, half-yearly or annual basis, and the available options may vary depending on the chosen insurance company. |
Single lump sum investment or monthly installment options may be available with some financial institutions. |
Death benefit |
Yes and designated beneficiary(ies) can be specified. |
No. |
Cooling-off period |
Yes. | No. |
The inheritance function of insurance
Life insurance products, including Investment-linked Assurance Scheme, provide death benefits. In the event of the insured's death, both the policyholder and the beneficiary(ies) designated by the policy can receive death benefits directly, thus passing the legacy to the next generation. Some life insurance products not only offer the aforementioned death benefit arrangement but also allow for multi-generational legacy planning by enabling customers to change the policyholder and the insured, providing more flexibility.
Prepare for the future with our life insurance options
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Disclaimer
The information contained in this material is for informational purposes only and is not intended to constitute any recommendation or advice to any person. Readers should not make any decision based solely on the information contained herein. Before acting on any information in this material, readers should consider their personal situation and seek independent advice.
The information contained in this material does not constitute an offer for the purchase or sale of any insurance products or services. No insurance product or service is deemed to be offered, marketed or solicited for sale in any jurisdiction in which such offer, marketing or solicitation would be unlawful under the laws of such jurisdiction.
Zurich Insurance (Hong Kong) has based this material on information obtained from sources it believes to be reliable, but it does not warrant the correctness, adequacy and completeness of the information contained herein.
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