Charges come out every year as a share of the policy's value, so their cost compounds. In the ILP calculator's default case, S$20,000 over 10 years with a 6% fund return and 1.5% charges, the charges take about S$4,758, roughly 30% of the fund's growth.
Why a small percentage matters
A charge of 1.5% a year sounds small, but it is taken from a growing balance every year, and what is taken no longer grows. Over ten years it compounds into a large share of the growth.
The default case worked through
S$20,000 invested for 10 years at 6% a year with no charges would grow to about S$35,817. With 1.5% charges the net return is 4.5% a year and the amount is about S$31,059. The difference, about S$4,758, is what the charges take: 30% of the growth. If the charges were one percentage point lower, you would end with about S$3,104 more.
These use one constant return and one constant charge, which is a simplification. Real charges vary by year and by how your policy deducts them.
Where to find your charges
Your policy schedule or the fund fact sheets show the charges. Add the fund management fee and the policy or insurance charges together to get the total annual charge, then try it in the calculator.