In today’s era life insurance has become an important necessity to have, especially for the heads of families and those who work high risk jobs. Nevertheless, although most people have realized the importance of life insurance, at times some people hesitate to invest money, which can amount to quite a large sum, in order to anticipate risks that they view as uncertain. These kinds of people wil view investments as more important than insurance. Thus unit link insurance was created to cater to their needs.
Unit link insurance is a type of life insurance product which combines the functions of insurance protection and a financial investment managed by the insurance company. This provides a new alternative for people who prefer to be able to focus more on their investments while keeping an insurance. Yet even with this advantage, there are still a few things to consider including the benefits and disadvantages of this insurance type, so that we do not regret our decision in choosing a unit link insurance product.
Unit link insurance products commonly offer the following benefits:
- With a single insurance account we have both the protection and investment functions. The investment can also be fully managed by the insurance company, saving us the trouble of calculating each investment decision for the unit link.
- The investment Instrument offered are being managed by a professional investment manager by default, and can be selected according to risk profile. Also, progress reports will be sent to you each month.
- There are also additional rider options such as health protection, or protection against permanent disability and critical illnesses. This will facilitate monitoring on your insurance as the account combines all your protection needs in a single report.
Yet on the other hand, there are also several other things that we have to consider before agreeing to join into a unit link insurance:
- Thoroughly read all documents related to the application and policy of your unit link insurance to gain a comprehensive understanding of the terms and conditions in effect, and do not fall into a disadvantageous conditions when the time comes to file a claim.
- The Risk of loss on the investment is entirely borne by you as the owner of the insurance account, and not by the insurance company.
- The investment yield will also contribute to determining the breadth of the insurance protection. If the investment yield decreases then the value of protection also goes down.
As in deciding to purchase a car or a gadget, thoroughness is very important in choosing an insurance product, especially for unit link insurances. Thus, we must exercise care in determining the most suitable insurance product so we do not regret our decision in the future.
