My instructor wouldn't commit to answer as to which was right or wrong, but mentioned that an approach only has 2 realistic outcomes: that being a landing or a go-around, by which you have a missed approach procedure and would usually climb back into IMC or on top again.
I wonder if your instructor has any real world IFR/IMC experience.
Nothing wrong with coming down an ILS then once in visual conditions break off the procedure and continue VFR, just ensure ATC are aware of your requirements. I wonder what your instructor would do if he had to do a visual circle to land after an ILS when the airfield did not have an ILS on each end?
Be aware though that using an ILS generally incurs a fee payable to the provider.
Fly safe