If you plan to purchase unit-linked life insurance products, you should pay attention to the following:
- Investment-linked life insurance is a long-term investment and life insurance product and is only suitable for investors who are prepared to hold it for a long time. Remember to pay attention to the long-term nature of the product, such as upfront fees, early surrender or withdrawal penalties, and long-term customer rewards (if you meet certain conditions).
- Check the “Things to Know Before Investing” section of the “Product Fact Sheet”, where insurance companies will list the expected minimum holding period for unit-linked life insurance policies. If you are not prepared to hold the policy for longer than the specified minimum term, the investment-linked life insurance policy may not be suitable for you. You should consider whether other alternative products of similar nature may better suit your personal needs, such as purchasing a life insurance policy independently and investing in funds separately through an “asset-based fund platform”.
- The policy value (and the death benefit of some investment-linked life insurance policies, if applicable) will be affected by investment risks and market fluctuations. Returns from unit-linked life insurance products may fluctuate significantly or even be negative (i.e., lose money).
- Be aware of fees and charges as they may reduce the amount available for investment. Make good use of the description of the total policy charges in the “Product Information Summary” to help you understand the overall charges at the policy level and compare different unit-linked life insurance products.
- Purchasing unit-linked life insurance products is different from investment funds. When you purchase unit-linked life insurance products, you are purchasing a life insurance policy, not its underlying assets.
- Your intermediary should disclose to you in the Important Information Statement the remuneration received by the intermediary for selling unit-linked life insurance policies. You should ask the intermediary for more information about intermediary remuneration before deciding to purchase a policy. If you are not satisfied with or do not fully understand the information provided by the intermediary, you should carefully consider whether you are suitable to purchase the investment-linked life insurance product, or whether you should purchase the product through the intermediary.
- Please carefully read the sales documents (including the “Product Information Summary”) and the “Important Information Statement” to understand the main features and risks of the product. When you sign the Important Information Declaration, the intermediary will ask you to confirm your understanding and agreement with the information provided.
- To decide whether a certain unit-linked life insurance product is suitable for you, you should carefully consider your personal circumstances and your reasons for purchasing an unit-linked life insurance product, including the following:
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- The nature and features of the unit-linked life insurance product, and whether the life insurance protection is suitable and sufficient to meet your needs;
- Whether the policy term (and expected minimum holding period) of unit-linked life insurance is consistent with your investment period;
- If the investment-linked life insurance policy you choose has a regular premium payment clause, whether you are able or intend to make contributions during the entire premium payment period you selected;
- Do you accept the fees and charges involved, especially if you may need to surrender your policy early?
- If you plan to appoint an intermediary to provide advice, selection, management or switching services on the investment options of your ILAS policy (hereinafter referred to as advisory services), please note the following points:
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- The advisory services provided by intermediaries are not a product feature of the unit-linked life insurance products. The relevant advisory service fees are not included in the total policy charges of the unit-linked life insurance, nor are they reflected in the description of the total policy charges in the “Product Information Summary” of the unit-linked life insurance;
- When considering whether to use consultancy services, you should check with the intermediary about the relevant fees. Intermediaries should continue to clearly disclose to you the amount, calculation method and payment frequency of advisory services. You should note that the advisory service fee is an additional charge and is not reflected in the total policy charges in the “Product Information Summary” of the unit-linked life insurance policy.
- Consultancy service arrangement is an optional service and you should have the right to cancel the service at any time.
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best wishes.
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