Singlife’s Grow — How is it Different from a Traditional ILP & How Does it Help One Broaden Their Investment Portfolio?

Singlife Grow ILP investment linked insurance plan savings invest

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Singlife, a fintech life insurer, has been rolling out insurance plans since 2017 that include its term life and critical illness plans; as well as the Singlife Account that can be easily accessed via the Singlife App.

Speaking of which, Singlife Account policyowners can now gain access to apply for Singlife’s latest product — Grow on the Singlife App.

*Note that the Singlife Account will go on waitlist from 15 December 2020. If you would like to sign up, you can still submit your Singlife Account application prior to 14 Dec, 23:59. Those who have not submitted their Singlife Account application by 23:59 on 14 December 2020 can put their names on the waiting list in the app to be notified of when the Singlife Account reopens.

Grow is an Investment-Linked Policy (ILP). We know that ILPs haven’t enjoyed the best reputation, but bear with us! For starters, you can buy Grow directly online and there’s no lock-in period and no withdrawal charges. And for those who are always busy and on-the-go, being able to access Singlife’s Grow via the Singlife App is a major convenience on its own.

More on Singlife’s Grow as well as ways to use it to broaden one’s investment options below!

Recap: What are ILPs and who are they for?

Those who already have some investment experience, may or may not have purchased an ILP before. Very quickly, here’s a quick primer on ILPs and who may consider it as an investment option:

What is an ILP?

  • Generally speaking, ILPs are policies that have both a life insurance coverage and an investment component
  • Premiums go towards paying for units in one or more sub-funds of the policyowner’s choice — some units purchased are then sold to pay for insurance and other charges, while the rest remain invested
  • ILPs provide coverage for death, and if included, for total and permanent disability (TPD)
  • As the value of an ILP depends on how the sub-funds perform, returns are not guaranteed

Who can consider ILPs as an investment option?

  • ILPs are known to be complex as they have 2 components: Investment and insurance
  • As such, ILPs are classified under Specified Investment Products that aren’t listed on an exchange (unlisted SIPs), and as per MAS guidelines you’ll need to pass the Customer Knowledge Assessment (CKA) should you wish to buy an ILP
More about the CKA
What is it? An assessment related to your educational qualifications, investment experience and work experience to ascertain your understanding of underlying risks and features prior to any purchases
How to pass? Satisfy at least one criteria
What are the criteria?
  • Have the relevant educational qualifications
  • Have a professional finance-related qualification
  • Have a minimum of 3 consecutive years of relevant working experience in the past 10 years
  • Have made at least 6 transactions in unlisted SIPs in the last 3 years. Transactions include buying unlisted SIPs or topping up your investment in an unlisted SIP

 

How is Singlife’s Grow different from traditional ILPs?

A lot of ILPs have many underlying charges that are higher than expected. Here are some ways Singlife’s Grow differs from traditional ILPs:

Traditional ILP Singlife’s Grow
1. Growing customers’ money Typically, not all premiums are invested and a proportion go to paying premium charges. 100% of premiums are invested to purchase units.
2. Fees and charges This varies from policy to policy and could affect one’s investment value. Typically, there are many layers of fees, such as insurance charges, admin charges, fund management fees, surrender charges, , bid offer spread, and so on.  Only one single charge — management fee of 0.25% of the account value, payable per quarter. The full amount of premium paid goes to investing in sub-funds.
3. Ease of withdrawal Usually has surrender charges. – No withdrawal & surrender charges or lock-in period
– Partial withdrawal up to 95%, and at least S$1,000; account value after withdrawal must not be less than S$1,000
4. Insurance coverage Offers insurance coverage in varying amounts. There will be a trade off between the amount of insurance coverage provided and the amount available for investment. The higher the level of coverage selected, the more units will be – sold to pay for the insurance charges and the fewer units will remain to accumulate cash values under your policy. With an investment focus, 100% of premiums are invested to purchase units. The life coverage is the higher of your account value or 101% of your net premium. 
5. Choice of sub-funds – Onus is on customer to choose the different sub-funds
– Time will spent on research
– Potential “choice paralysis” as there may be many sub-funds to choose from
–  people may not be able to make the best decision
– Need only choose from 3 simple risk-rated portfolios managed by experts from Aberdeen Standard Investments (ASI) — conservative, balanced, or dynamic
– The portfolios invested into a combination of sub-funds at the weightings decided by ASI
– ASI manages each portfolio and actively invests across multiple asset classes and help customers rebalance their portfolios to achieve an optimal balance of risk and return

Note: As with all investment vehicles, returns are not guaranteed; do still exercise good investment principles when purchasing Singlife’s Grow 

 

 

What else can Singlife’s Grow do?

  1. Alleviate your “busy-ness” — Easily monitor Singlife’s Grow via the handy Singlife App, which is available 24/7 so you won’t need to keep texting your agent at 4.30am in the morning (some of us have moments where we suddenly wake from sleep worrying about random things such as investments). Especially for those who already know what they want and prefer not seeking advice, application is easily done via an online interface so there’s no need to carve out time to meet an agent, talk it through and do up reams of paperwork…
  1. Multiply your Grow — An individual can have many goals with differing time horizons and risk appetites. So, Grow allows customers to apply for multiple Grow policies with different risk-rated portfolios depending on their financial goals. For example, if one of your investment objectives is a shorter-term goal of say, marriage, the goal of your “marriage portfolio” might be primarily capital preservation. As you may have a shorter time horizon, and thus less time to wait out the market fluctuations, you may wish to take less risk in your “marriage portfolio” selection. However, the same logic might not apply for your ”retirement portfolio”, as you have a longer time horizon for building up towards this goal. It is important to select a portfolio that is commensurate with your financial goal, time horizon and risk appetite.
  1. Good synergy with the Singlife Account — All Singlife’s Grow customers are Singlife Account policyowners (you’ll need to have a Singlife Account to be eligible to apply for a Grow policy). The crediting rate for the Singlife Account is 2.0% p.a.^ on your first S$10,000, so for anything beyond that, it may be worthwhile putting into Grow to attract more potential returns. You can even use the Singlife Account to fund your Grow policy.
  1. Insurance coverage — While Singlife’s Grow is more to meet your investment goals than a protection need (complements your existing life coverage), there are still some insurance benefits:
Death benefit The higher of:
– 101% of net premiums*, or
– Account value
Less any outstanding charges
Policy terminates once the death benefit has been paid
Terminal illness benefit Same as that of death benefit Same as that of death benefit

*Refers to single premium plus recurring single premium and ad-hoc premium paid to date less partial withdrawals

  1. Premiums & payment schedule/subscription — Make a one-off payment (single premium), opt for a monthly recurring single premium (RSP), or put in ad-hoc premium payments as and when your bonus or extra money comes in.
Single premium Recurring single premium Ad-hoc premium
At least S$1,000  Regular payments from S$100/month; possible to adjust this RSP amount Make additional ad-hoc premium payments while the policy is in-force; each ad-hoc premium payment should be at least S$100

 

 

How one can use Singlife’s Grow to broaden their investment options

Here are some scenarios in which the product can help to broaden their investment options:

Scenario 1: Individuals with busy lifestyles

Tony is always on the go, go go. As someone who is always zipping to and fro work/social appointments, his schedule is always packed. He finds it a breeze to sign up for Grow via the Singlife App while he’s in a taxi to his next meeting — without the need to set up an appointment with an agent. He is also a Singlife Account policyowner, so this makes it easier for him to sign up for Grow via the Singlife App, after passing the CKA. 

In his Singlife Account, he is already earning 2.0% p.a.^ on his first S$10,000. As Singlife’s Grow is managed by Aberdeen Standard Investments (ASI), he decides to park his next tranche of funds there, making ad-hoc premium top-ups as he pleases.

Scenario 2: Working adults who are looking to invest their extras

Jill has been working for almost a decade in the banking sector, and has already built up a nice nest egg in her savings account, but doesn’t know what to do with this cash as it’s just sitting there but not really attracting great interest.

She decides to sign up for Grow (after signing up for a Singlife Account and passing the CKA). In addition to putting funds in the Singlife Account, she parks her additional funds in Grow. 

Jill is not worried about putting a portion of her additional funds into Grow for investment purposes as she aims to leave the money in Grow for as long as possible, to hedge against inflation while growing her money, and she’s able to make a withdrawal of what she needs (if that should happen) as there is no lock-in period or withdrawal charge.

Scenario 3: Young digital natives who have yet to accumulate much wealth

Zane has just graduated with a finance-related degree and doesn’t have much savings. The money he has, was earned through internships and part-time gigs. As he doesn’t have any commitments yet (other than the 12-month instalment for his new electric guitar), he is looking to put a portion of his savings and future salary into an investment each month.

A digital native, he prefers to do everything online, be it ordering food to banking. Naturally, Singlife’s insurance plans appeal to him. He applies for a Grow after signing up for a Singlife Account and passing the CKA. After putting in S$5,000 in his Singlife Account, he also puts in an initial premium of S$1,000 and opts for a recurring single premium of S$500 every month for Grow to earn more potential returns.

Grow your wealth with Singlife’s Grow

To sum up, SingIife’s Grow is an ILP product with an investment focus. The management fee is a competitive 0.25% per quarter of the account value. There’s also no lock-in period and no withdrawal fee.

You’ll need a Singlife Account — plus pass the Customer Knowledge Assessment to get started. Managed by Aberdeen Standard Investments, choose from 3 risk-rated portfolios to suit your needs — conservative, balanced, or dynamic.

The minimum investment is a S$1,000 single premium payment, but you can opt to make recurring single premium payments (from S$100/month) and ad-hoc premium payments as well.

Find out more about Singlife’s Grow here.

^2% p.a. on first S$10,000 | 1% p.a. on amounts above S$10,000. | There are no returns for amounts above S$100,000. | Returns are not guaranteed.

The information is meant for your general knowledge and does not regard any specific investment objectives, financial situations or particular needs any person might have and should not be relied upon as the provision of financial advice. 

Singlife’s Grow are Investment-Linked Policy (ILP) which invest in the respective ILP sub-funds within your chosen portfolio. Investment products are subject to investment risks including the possible loss of the principal amount invested. The portfolio performance is not guaranteed and the value of the units and the income accruing to the units (if any) may fall or rise. Past performance is not necessarily indicative of future performance. A product summary, terms and conditions and fact sheet relating to Singlife’s Grow are available. You should read the product summary, terms and conditions and fact sheet before making a commitment to purchase.

These policies are protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact Singlife or visit the LIA or SDIC web-sites (www.lia.org.sg or www.sdic.org.sg). 

This advertisement has not been reviewed by the Monetary Authority of Singapore. 

Information is correct as of 5 Dec 2020.