Focus
Fees & Pricing
Coverage
Two ILP Types
Angle
HNW / Business
A clear, debate-aware guide to how ILPs work, what costs matter, and when the investment-focused version can make sense. Not all ILPs are the same — charges and suitability decide outcomes.
Disclaimer: This page provides general information for educational purposes and is not financial advice. Please consult qualified professionals for your specific situation.
Start Here
Core Message: For wealth building, mixing high insurance coverage inside the ILP wrapper often creates fee drag and complexity. Separate protection from investing is usually clearer.
Understanding The Flow
Your premium flows through several stages before it becomes investment value.
Premium Paid
Your monthly/annual contribution
Deductions/Charges
Policy fees, insurance charges
Invested in Funds
Remaining amount buys units
Account Value
Changes with market
Wealth Accumulation ILP
100% invested focus
Insurance + Investment ILP
High coverage inside
Key Takeaway: Where your premium goes after deductions is critical. Higher charges = less working capital for investment growth.
The Core Difference
Understanding this distinction is essential before any ILP decision.
Recommended for Wealth
100% (or near-fully) invested. Minimal insurance charges. Designed for long-term wealth building.
Best for: Long-term wealth accumulation, disciplined investing, HNW profiles seeking structure
Caution for Wealth Building
High coverage inside the wrapper. Mortality charges increase with age. Insurance costs eat into investments.
Common regret: "I wanted to invest but my insurance costs kept increasing and eating my returns."
| Aspect | Wealth Accumulation ILP | Insurance + Investment ILP |
|---|---|---|
| Primary Purpose | Wealth building, investment returns | Protection + some investment |
| What Premiums Pay For | 100% into investment funds | Insurance charges + investment remainder |
| Insurance Charges Impact | Minimal — no ongoing mortality deductions | Significant — increases yearly with age |
| Flexibility | Withdrawals, top-ups, premium holidays | More restrictions, coverage tied to policy |
| Best Suited For | Long-term investors, HNW, AI-eligible | Those who prioritise bundled coverage |
| Common Regret Reasons | Early surrender penalties | Insurance costs exceeding expectations |
| What to Watch | Fund fees, surrender period | Mortality tables, coverage cost escalation |
Conclusion: For most people pursuing wealth building, mixing high insurance coverage inside the ILP wrapper often creates fee drag and complexity. Separate protection from investing is usually clearer.
Interested in learning more about wealth accumulation ILPs with 100% allocation?
PM to Learn MoreBuilding Trust
We address the common criticisms honestly. Understanding both sides helps you make informed decisions.
ILP is a structure, not inherently good or bad. The outcome depends on:
Truth: Some ILPs are unsuitable for certain profiles. That's a suitability issue, not a structural flaw.
This is partially true and worth understanding:
Truth: Layer fees do exist. The question is whether total cost is reasonable for what you get. Wealth accumulation ILPs typically have lower wrapper charges.
This is a common misconception:
Truth: Market returns can mask high fees. Always evaluate net returns and compare alternatives.
This blanket statement misses nuance:
Truth: The issue is usually with insurance-heavy ILPs, not all ILPs. Wealth accumulation ILPs serve a different purpose.
Our Position: "Not all ILPs are the same. Charges and suitability decide outcomes. We separate protection and investing for clarity, then choose wrappers only if they help."
The Hidden Cost
This is why many people regret purchasing insurance-heavy ILPs.
Multiple charges stack up. Understanding each layer is critical.
Policy/Admin Fees
Flat fee or % of account value annually
Insurance Charges (if any)
Mortality + rider costs — increases with age
Fund Management Fee
Charged by underlying unit trust managers
Platform/Wrap Fee (if applicable)
Some ILPs add platform charges
Transaction/Switching Fees
Some charge per switch after free switches
The issue is not "ILP" by itself. It's the combination of rising insurance costs and layered fees eating into the investment account over time. Insurance-heavy ILPs create avoidable drag for wealth-building.
This is why many people regret purchasing high-coverage ILPs. Insurance costs increase with age and eventually eat into your investment.
Age 25
$56
Monthly insurance cost
$144 goes to investment
Age 50
$218
Monthly insurance cost
-$18 deficit from investment
Age 80
$3,292
Monthly insurance cost
Massive deduction from portfolio
Illustrative example based on $200/month premium with $100,000 coverage for Death, TPD, CI, and ECI. Actual figures vary by insurer and profile.
Key Insight: For wealth building, insurance-heavy ILPs often create avoidable drag. Investment-focused ILPs minimize these insurance deductions.
Want to maximize your investment without insurance drag?
Ask us about 100% allocation wealth accumulation ILPs.
Balanced View
Investment-focused ILPs can be suitable for specific profiles. Here's a balanced view.
Long-term investors
Who understand investing and fee impact
Those who want managed structure
Portfolio within an insurance wrapper, with discipline
Those who accept constraints
Surrender periods, liquidity limits in exchange for structure
Eligible higher net worth profiles
Investment-focused ILP design with AI eligibility
Those using ILP for primary insurance
Term insurance is more efficient for pure protection
Those who can't commit long-term
Early exit = surrender charges and losses
Those who don't understand fees
Lack of clarity leads to disappointment
Those needing high protection
Better solved with term + separate investments
Our Framework
We recommend a clean, separated architecture for most wealth-building needs.
Separate and efficient
Diversified investments
Only if it truly helps
Don't panic. Follow this framework to evaluate properly:
Clarify Objective
Insurance vs wealth — what did you want?
Review Fees
Fee layers and insurance deductions
Check Surrender
Lock-in and surrender implications
Compare Alternatives
Term + invest structure
Decide
Keep, reduce, restructure, or replace
Important: Don't cancel blindly. Evaluate surrender charges, remaining coverage needs, and alternative costs before making any changes.
Premium Considerations
Why some high net worth clients use investment-focused ILP wrappers strategically.
Portfolio structuring and discipline
Systematic contributions, forced savings behavior
Simplified nomination mechanics
Beneficiary arrangements via policy design
Access to curated mandates
Some ILPs offer institutional-quality funds
Systematic withdrawal flexibility
Regular income drawdown if plan supports
Estate/liquidity considerations
Death benefit structure, bypass of probate
Separate business risk from personal wealth
Ring-fence personal assets from business creditors
Liquidity planning for family continuity
Ensure family has access to funds immediately
Insurance wrappers as one tool
Part of broader wealth structuring, not the whole plan
Key principle: For business owners, we view ILP wrappers as one structuring tool — not the entire wealth plan.
Looking for a wealth structuring discussion?
We work with HNW clients and business owners on tailored ILP structures with institutional-grade fund access.
Due Diligence
Use this checklist to ensure you understand what you're getting into.
What are all fees at policy level?
What are all fees at fund level?
Is there an insurance charge? How is it calculated?
Does insurance charge increase with age?
What is the allocation rate? (% of premium invested)
What are surrender charges and period?
Any switching fees and limits?
Any withdrawal conditions?
What happens if I stop paying?
What happens in a market drawdown?
How is death benefit determined?
Is this designed for wealth accumulation or protection?
Pro tip: If you can't get clear answers to these questions, reconsider the purchase.
Simplified Decision
A simple framework to help you decide.
What's your primary objective?
Recommendation:
Separate Term Insurance + Investments
Recommendation:
Consider Wealth Accumulation ILP
Recommendation:
Start with simpler portfolio first
Interactive Tools
Use these educational tools to understand fee impact and find your fit.
See how 100% allocation + lower fees compound
~85% allocation, ~3.5% fees
100% allocation, ~2.5% fees
Insurance + Investment ILP
$312,450
After fees & lower allocation
Wealth Accumulation ILP
$424,785
100% allocation, lower fees
Wealth Accumulation ILP Advantage Over 20 Years
+$112,335
More wealth from the same premium
100%
Allocation
Lower
Fees
No
Mortality Drag
Illustration only. Assumes Insurance ILP: 85% allocation, 3.5% total fees. Wealth ILP: 100% allocation, 2.5% total fees.
Quick self-assessment (not sales advice)
1. What's your primary objective?
2. Do you need high insurance coverage inside the plan?
3. Can you commit long-term (10+ years)?
4. Are you sensitive to layered fees?
5. Are you an Accredited Investor?
PM us your policy name and latest statement for a complimentary review checklist. We'll help you understand your current position.
Review My Existing ILPWealth Accumulation ILP
Modern wealth accumulation ILPs are designed for long-term growth with structures that maximize your investment potential.
Even during market downturns, your beneficiaries are protected. The death benefit is the higher of:
105%
of policy value
101%
of net premiums paid
Net premiums = total premiums paid minus withdrawals. Your principal is protected for your family regardless of market conditions.
Through ILP wrappers, you can access institutional-grade funds typically reserved for accredited investors — without needing to meet AI eligibility requirements.
Fund managers include world-class names covering all key markets globally.
Pay for just 3 or 5 years, then let your money compound. Ideal for those avoiding long-term payment obligations.
Policy charges waived after year 10. More of your investment goes towards growth rather than fees.
Booster bonuses, loyalty bonuses, and accumulation bonuses that accelerate your investment from day one.
Option to withdraw dividends as passive income stream or reinvest for compounding growth.
Penalty-free withdrawals for life events. Premium holidays when you need them.
Complimentary service to track and adjust your portfolio based on predefined allocation.
Waiver of premium shortfall charge if you lose your job involuntarily.
100%
Allocation
3-5 yrs
Premium Term
50+
Fund Options
105%
Death Benefit
$0
Charges After Y10
For eligible clients, we can discuss which wealth accumulation ILP structures best fit your goals.
Key Benefit: Through ILP wrappers, you can access institutional-grade funds typically reserved for accredited investors — without needing to meet AI eligibility requirements. Specific features vary by plan. We'll confirm suitability before any discussion of structures.