Better to invest in ILP or unit trust?

QUESTION FROM THE PUBLIC

1. According to Dr Money, he has grouped unit trust seperately from insurance (ie ILP). Please explain the difference.

Reply: An ILP is offered by an insurnce company. It combines insurance with investment. An insurance adviser sells the product.

A unit trust is operated by a fund manager and distributed by a bank or a financial adviser. Apart from the charge by the unit trust operator, the financial adviser usually add another layer of charge.

2. Does that mean that unit trust usually charges a higher sales fee as compared to an ILP. What about the returns? Which one tends to give higher returns?

Reply: Different unit trusts and ILPs have different charges. It is very difficult to generalise. Many of them (except for NTUC Income) aim to make much profit, so they give less to the investors.

3. If I were to invest in an ILP, say the ideal plan, is the insurance component compulsory? Can I opt for 100% into investment alone?

Reply: If you buy our ideal plan, it is not compulsory to pay for insurance. You can opt for 100% investment. You can buy insurance separately, if you wish. We offer low cost term insurance.

TO FIND OUT MORE.

I suggest that you attend my education talk. You can register for the "financial tips for the young" http://www.income.coop/seminar/

You can also see a salaried consultant by visiting our business center.
http://www.income.coop/businesscentre/