Currently, insurance companies must prepare a personalised illustration document for each investor and the illustration document must be provided for your review and signature before signing of application forms.
Based on certain assumed rates of returns, an illustration document demonstrates the projected surrender values over the term of the policy, ie, the sum of what the investor may receive, net of all relevant fees and charges, on surrender at the end of each of the first five years and then for every fifth year until maturity of the investment-linked assurance scheme (ILAS).
You should note that the actual return rate may differ from the hypothetical rates used.
The purpose of the illustration document is not to project or forecast returns available under the ILAS but to demonstrate the impact of fees and charges on the amount that the investor may receive based on certain assumed rates of return. Intermediaries selling the ILAS must explain the illustrated cost structure to you as a prospective investor and you have to confirm your understanding by signing on the illustration document.
Format of illustration document
To know more about ILAS, read the article series on the Investor and Financial Education Council.
Last update: 30 Sep 2019