Are portfolio bonds the same thing as structured Investment-Linked Policies (ILPs/SILPs)?

Portfolio bonds and structured Investment-Linked Products (ILPs) are not the same, though they share some similarities in that both are investment vehicles that may incorporate insurance components.

Portfolio Bonds are typically life insurance policies that allow policyholders to invest in a range of underlying assets, such as mutual funds, stocks, or bonds. They provide flexibility in terms of investment choices and often come with tax advantages. The policyholder can adjust the investment mix over time based on their financial goals and market conditions.

Structured ILPs, on the other hand, combine traditional life insurance with investments linked to specific assets or indices, often with embedded features like capital protection or guaranteed returns. These products are structured with predetermined payouts based on the performance of the underlying investments but also carry more complexity than a standard portfolio bond. They are designed to meet specific investment strategies and often appeal to investors seeking both insurance coverage and structured returns.

In summary, while both products serve to integrate insurance and investment, portfolio bonds offer greater flexibility in asset selection without the complex structuring of returns that characterises structured ILPs. Thus, they cater to different investment preferences and risk profiles.

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Why structured Investment-Linked Policies (ILPs/SILPs)?