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Financial advisory
RES5Financial Advisory Services✓A structured ILP is marketed to 'seek to provide' annual payouts and repay capital at maturity. How does this differ from an ordinary bond?
An ordinary bond issuer has a contractual obligation to pay coupons and principal, and failing to do so is a default. A structured ILP only 'seeks to provide' the targeted returns — the insurer is not obliged to step in if the investment experience is insufficient, except where a capital-guarantee feature is expressly stated.
'Seek to provide' looks bond-like but is not a legal obligation — the risk profiles are entirely different.
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