Should I surrender my ILP, keep paying, or cut my future losses? Compare both paths on your own numbers.
An investment-linked policy (ILP) bundles life insurance with investing, and its fees, including distribution costs, policy charges, mortality charges, and fund-level expenses, come out of your premiums and your units. If you’re wondering whether to keep paying or cut your losses, there is a clean way to frame the decision: from today onwards, which path grows your money faster?
This is built for the common “stuck in ILP” situation: bought it before you were financially literate, discovered the fees later, and now need to know whether surrendering actually improves the outcome from today. If the honest sentence is “bought it before I was financially literate” or “I was young and dumb”, start with the numbers from today instead of the regret from yesterday.
This calculator compares two paths to the same horizon. Keep the policy: your current surrender value plus every future premium, growing at the policy’s net return. Surrender now: the same surrender value invested as a lump sum, with each future premium (minus any replacement term insurance you buy) redirected into low-cost index investing. The break-even figure tells you the net return your ILP must actually deliver for keeping it to be the better choice.
Most ILP holders have paid far more in premiums than their policy is worth today, and that gap makes surrendering feel like “locking in a loss.” But the loss already happened. It is a sunk cost. Keeping the policy doesn’t win it back; every future premium is a fresh decision about where new money grows best. This calculator deliberately shows the sunk cost separately so it doesn’t contaminate the forward-looking comparison.
Every ILP comes with a Benefit Illustration (BI) showing projected values at 4% and 8%, gross rates set by industry convention, before the effect of policy charges. Enter those values and the calculator backs out the net return your policy actually implies, which is typically 1.5-3 percentage points below the headline rate. That fee drag, compounded over decades, is usually what decides this comparison.
Surrendering ends your death benefit and any critical illness rider. If anyone depends on your income, price a term life policy first and enter its cost. The calculator deducts it from the redirected premiums so the comparison stays honest. For pure protection, term cover typically costs a fraction of an ILP premium for the same sum assured.
Surrendering isn’t the only exit. Many policies can be converted to paid-up status, where you stop paying premiums and keep a reduced policy, or allow a premium holiday. Near the end of a policy’s term, maturity bonuses can also tilt the math toward keeping it. Ask your insurer for the paid-up value and terms before making a final call.
This tool provides educational estimates only, not licensed financial advice. Surrendering a policy is irreversible and may leave you uninsured. Speak with a MAS-licensed financial adviser before acting.
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In the early years of an ILP, a large share of your premiums goes to distribution costs, agent commissions, and policy charges rather than your investment units. Surrender charges may apply too. The gap between premiums paid and surrender value is a sunk cost. It is gone whether you keep the policy or not, so it should not drive the decision.
Yes. Surrendering ends the death benefit and any critical illness rider immediately. If anyone depends on your income, price a replacement term life plan before surrendering. This calculator has a field to deduct that cost from the redirected premiums so the comparison stays fair.
Two common middle paths are converting the policy to paid-up status, where you stop paying premiums and keep a reduced policy, or taking a premium holiday if your policy allows one. Neither is modelled here, so ask your insurer for the paid-up value and terms before deciding.
No. This is an educational comparison based entirely on the assumptions you enter. Surrendering a policy is irreversible and may leave you uninsured, so speak with a MAS-licensed financial adviser before acting.
From your insurer's portal or annual statement. It can be $0 in early years.
Optional. Shows what the policy has already cost you.
Low-cost index investing; global equities have averaged ~6-7% long-run
ILP returns net of fees typically run 1.5-3% below the illustration rate
If you need to keep coverage after surrendering, price this first.
Defaults to your remaining premium term
Optional: the projected maturity values in your policy’s BI document. When provided, these replace the policy return slider.
Leave at 0 if you don't have it
Ahead after 15 years if you surrender & self-invest
S$29,919
Your ILP must return 6.0%/yr net of fees to match self-investing
Keep path assumes 3%/yr net of fees; self-invest path assumes 6%/yr.
Keep the policy
$87,660
Surrender & self-invest
$117,580
Break-even policy return
6.0%/yr
Both paths start from the same money, your surrender value, and receive the same future cash (your premiums). The only differences are the growth rate each path earns and any term insurance you buy to replace lost coverage. If the break-even return is higher than what your policy’s Benefit Illustration implies after fees, the math favours surrendering.