The NTUC GrowthLink is a single premium Investment-Linked Plan (ILP) that allows you to invest in the Aim Series of funds with a bit of insurance protection against death and total and permanent disability (TPD).
From age between 0-64, there will be an insurance protection of 105% of the total invested amount for medically standard life. For medically sub-standard cases, the coverage will be a token 101% of the invested amount. If the value of the units is more than the insurance protection, that will be the amount paid out on death or TPD.
From ages 65 onwards, the payout on death or TPD will be the value of the units or the total invested amount (whichever is higher).
The GrowthLink plan is available under cash or SRS. The minimum premium to start off the plan is $5000 with ad hoc top ups of minimum $1000. You can also schedule regular single premium top ups of $250 quarterly, $500 half-yearly or $1000 annually.
The GrowthLink policy does not impose any fees for the cost of insurance. There is also no initial policy fee but there will be an annual fee of $50 deducted at each anniversary date. If someone invested only $5000, this $50 will be quite high in the first few years (almost 1% of amounted invested.) On the other hand, if the investment amount is $50,000, it works out to be only 0.1%.
Funds are sold at a bid-offer spread of 3.5%. As the policy currently gives bonus units of 0.5% on invested amounts, the effective bid-offer spread will be 3%. This is higher than online DIY unit trust portals which charge around 2%, but lower than the 3-5% typically charged by banks.
The Aim Series of Funds also have a relatively low annual management fee (about 1%) compared to other unit trusts. At this stage I’m not sure whether the fund manager Schroders will rebate part of the annual management fee back to the fund if it invests into other Schroders unit trusts. The cost structure will be very good if it can do that.
The funds available under the GrowthLink plan includes not only the new Aim Series, but also NTUC’s previous funds available under their ILP. Unlimited free switching is available for policy holders. The list of funds are as follows:
I like the life cycle and market cycle idea behind the Aim Series of Funds, although how well the fund performs (relative to other life cycle funds out there) will ultimately depend on the skill of the fund manager in implementing their market cycle analysis.