The real cost of an investment-linked policy

Investment-linked policies are neither a scam nor a miracle — they are a tool with a price. Know the price. The fee layers to ask about: premium allocation (in early years, part of your premium may not be invested at all), insurance charges (deducted monthly from your units and rising with age), fund management fees (typically 1 to 1.75 percent annually), and surrender charges in early years. Because insurance charges rise with age, the same coverage that costs little in your thirties can consume significant units in your sixties. Ask for a benefit illustration to age 80, not just 65. When does an ILP make sense? When you value flexibility to adjust coverage and can commit long enough to get past the front-loaded years. This is education, not advice. Ask your advisor to walk through every fee line in the product illustration — a good one will do it gladly.