Investment-Linked Policies (ILPs): Why I Urge Caution for Muslim Families in Singapore
Modern Muslim FinanceInvestment-Linked Policies (ILPs) may seem like an attractive "two-in-one" solution, offering both life insurance and investment growth. However, for Muslim families in Singapore, these products require careful scrutiny. Most ILPs are based on conventional insurance structures, which may involve elements like Riba, Gharar, and Maisir—making them non-compliant with Shariah principles, even if they offer Halal sub-funds. Beyond compliance, ILPs often come with high fees, lack of flexibility, and limited control over your investments. In contrast, separating your protection and investment—using Takaful for insurance and Halal unit trusts or ETFs for wealth-building—provides greater transparency, control, and long-term value. Always assess the structure and costs before committing to an ILP.
