Why investment-linked policy sales have surged even as complaints rise

Singapore's investment-linked policy (ILP) sales have surged by over 120 percent over three years, despite a rise in complaints related to alleged misrepresentation and inadequate disclosure. The Life Insurance Association (LIA) reported that weighted new business premiums for ILPs reached S$2.88 billion in 2025, up from S$1.31 billion in 2022.

Claims related to ILPs at the Financial Industry Disputes Resolution Centre (FIDReC) jumped from 42 in 2022 to 164 in 2025, with a spike in 2024. Many consumers lack a good understanding of ILPs, assuming them to be similar to traditional insurance or believing in guaranteed returns and capital. The industry sees two recent design changes as drivers of growth: newer ILPs carry minimal death cover and include "welcome bonuses" of extra units given to customers upon purchase.

However, these bonuses often come with higher charges in the early years and minimum investment periods. Experts warn that ILPs are not guaranteed to grow in value and that returns and capital fluctuate with market conditions. LIA's Chan advises customers not to mistake capital guarantees for death benefits, as the investment value in ILPs fluctuates with the market.

Consumers should also be aware of fees and charges that can eat into returns, such as policy fees, fund fees, and administration charges.