The fees your statement never shows you

What does your ILP cost you each year?

If you just guessed, shrugged, or named a number you're not sure about, you're normal. ILP charges are spread across several layers, some printed on your statement and some baked into prices you never see. None of this is your fault. It is, however, your money, so let's walk the full list.

Start with the one nobody sees: the fund management fee. Every sub-fund charges an annual percentage, commonly between one and two percent, and it never appears on any statement because it's deducted inside the fund before the unit price is published. The price you see has already paid the fee. To find it, pull up the fund's factsheet and look for management fee or total expense ratio.

Next, the policy-level charges. Most ILPs deduct a monthly policy or administration fee by quietly cancelling a few of your units. Small numbers, individually. Multiply by twelve months and thirty years before you judge them.

Then the insurance charge, sometimes labelled cost of insurance or mortality charge. This pays for your actual cover, and it rises with age. In some policies it rises steeply enough that, late in life, it consumes a meaningful slice of your investment if the cover was never resized. This one line item is the reason a policy review every few years isn't a sales gimmick.

Older policies carry two more traps. Premium allocation rates sometimes meant that in your first years, only part of each premium bought units at all; if your first-year allocation was sixty percent, forty cents of every dollar went to charges. And surrender charges punish early exits, which is why quitting a young ILP often returns less than you paid in. Check whether either applies to yours. (If reading your own policy document feels like homework, that's because it is. Do it anyway.)

Switching fees round out the list, though many policies give you several free switches a year. Free switches are a feature. Using them is what separates a managed policy from a parked one.

Now, the one-hour audit. Pull your policy document and latest statement, and write down five numbers: total premiums paid, current surrender value, each sub-fund's management fee, the monthly policy charges, and the current insurance charge. Anything you can't find, email your insurer and ask directly. They're required to tell you.

Let me say the quiet part plainly. Fees are not evil. Real service costs real money, and a policy that's genuinely monitored and steered can be worth its charges. What you should never pay for is silence. If your policy carries the full stack of fees and nobody has reviewed it in years, you're paying for a service that isn't being delivered. That's the deal I hold myself to: charges you can list from memory, and a service you can watch working, every market day.

Would you keep paying a gym that locked its doors?

If you want the structured version of this exercise, my one-page fee audit checklist on the main site walks through every charge and the exact questions that get you a straight answer. It's free, and it exists because this hour of work changes more financial outcomes than most market predictions ever will.