Understanding Unit Link Insurance: Definition and Types

To provide life insurance in the future, currently many companies provide various insurance products. One type of insurance that is often chosen by the public and is relatively new is life insurance called unit link insurance. Because people are getting more and more attention, now is the time for you and the wider community to understand unit link insurance, from understanding to types.

Unit link insurance has a quite different meaning and type from other life insurance. This is because this type of insurance involves investment services. To find out more in-depth information about unit link insurance, the following is information that you can refer to.

Understanding Unit Link Insurance

To understand more deeply about unit link insurance, the following is information that must be listened to!

Understanding Definition of Unit Link Insurance

As previously explained, unit link insurance is a life insurance product that includes investment services. So, unit-linked insurance is a type of modern insurance that combines the protection benefits of life insurance and investment benefits. By choosing unit link insurance, you will get two benefits at once in an insurance product.

Unit Link Insurance Type

After understanding the meaning, now is the time to understand unit link insurance by type. Many types of unit link insurance are differentiated based on several aspects. The following is a complete explanation of the various types of unit link insurance.

Unit Link Insurance Based on Premium Payment

Based on premium payments, unit link insurance is divided into two types, namely:

single-PremiumUnit Link Insurance

This type of insurance requires the customer to prepare a deposit of the entire premium which is paid once in advance during the policy protection period.

Periodic Premium Unit Link Insurance

This type of insurance is the opposite of single premium unit link insurance. Customers can pay premiums regularly within a certain period.

Unit Link Insurance Based on Fund Placement

Based on the placement of funds, unit link insurance is divided into five types. The following are the types:

Money Market Unit Link Insurance

Money market unit link insurance is a type of insurance that will place all investment funds placed in money market instruments. This type of insurance has the lowest risk and return.

Fixed Income Unit Link Insurance

This type of insurance places a minimum of 80% of investment funds in bonds or debt instruments and the rest is placed in the money market.

Mixed Unit Link Insurance

Mixed Unit Link Insurance places investment funds into various instruments, such as stocks, bonds, and money markets.

Share Unit Link Insurance

This type of insurance places at least 80% of investment funds in-stock instruments. This type offers higher returns through dividends and stock price growth.

Sharia Unit Link Insurance

As the name implies, this type of insurance will place all of its investment funds into various investment instruments based on sharia principles. This insurance is further divided into several categories, namely unit link sharia shares, unit link sharia mix, etc.

This is complete information that you can use as a guide to understanding unit link insurance. Compared to other types of insurance, the advantages of having unit-linked insurance are more. This is because you can get two benefits at once in an insurance product.