Part 1: Introduction to ILAS

Paper V — Investment-linked Long Term Insurance · Part 1: Introduction to ILAS

Q1 Free

What is the main characteristic of an Investment-linked Assurance Scheme (ILAS)?

A. Combines life insurance protection with an investment component, with policy value linked to the performance of the underlying funds
B. Provides fixed returns unaffected by market fluctuations
C. Provides life insurance protection only with no investment component
D. Guarantees that the principal will not be lost

Show Answer

Correct Answer: A

An Investment-linked Assurance Scheme (ILAS) is an insurance product that combines life insurance protection with an investment component.
The policy value fluctuates according to the performance of the selected underlying funds, not a fixed return.
The policyholder bears the investment risk and the principal is not guaranteed.

Q2 Free

What is the key difference between an ILAS policy and a traditional life insurance policy?

A. ILAS does not provide any life insurance protection
B. Traditional life insurance policy value is linked to investment funds
C. ILAS policy value is linked to the performance of underlying investment funds, while traditional life insurance typically provides guaranteed or with-profits benefits
D. Traditional life insurance does not provide death benefits

Show Answer

Correct Answer: C

ILAS policy value is directly linked to the market performance of the underlying investment funds, carrying investment risk.
Traditional life insurance (guaranteed or with-profits) typically offers more predictable returns not directly linked to funds.
Both policy types provide life insurance protection, but differ in their return mechanisms.

Independent study aid. Not affiliated with or endorsed by the Insurance Authority (IA) or the Vocational Training Council (VTC).