Insurance is now beginning to spread in the community. If usually the type of insurance only offers protection services or protection of certain things, Then now the term investment insurance. The advantages offered by investment insurance, such as protection as well as investment become the main attraction. So most of those who are interested in investment insurance are the ones who do have a lot of money.
Investment insurance also has shortcomings that are not few that are rarely known by the public. Lack of such information could cause you a loss in the future. This should be considered well before deciding to use investment-based insurance.
Advantages of Investment Insurance
Investment insurance is a more practical system in which you can get two advantages at once that get protection / protection and investment money to increase income or as a benefit in the future. There are several types of insurance that can be obtained, such as life insurance, health insurance, education insurance, property insurance and investment at the end of the protection period. The more you maximize the insurance protection side, the safer the amount of investment you collect. So, you can optimize the amount of investment for long-term financial goals that have been planned.
This investment insurance payment system is relatively easy. You can pay by credit card so it is not required to come directly to the office concerned. You do not have to spend much time waiting for the queue. This is considered more flexible for some people. Especially for those who have a solid activity and a little spare time.
These advantages are being intensively offered by insurance companies and become the attraction of investment insurance so many people who are interested in using it.
In short the Advantages of Investment Insurance are:
- All in one. Life insurance, accidents, critical illnesses + mutual fund investments into one all
- Easy payment, can use credit card
- Get people to invest and get insurance.
Disadvantages of Investment Insurance
Investment insurance also has shortcomings to keep in mind and consider carefully before you decide to take out investment insurance. The drawback is the premium of the investment insurance itself. Premium is the amount of funds that must be paid per month as a liability in the participation in insurance. Premiums of investment insurance tend to be more expensive than separate insurance and investment. Your uncertain financial condition may be one of the obstacles to fulfilling investment insurance premiums.
In addition, the cash value of purchasing investment insurance products is very small. Even smaller than the premium value to be paid each month. Insurance parties themselves usually do not give much information about the type of investment that will be obtained. You also can not choose the type of investment you want because usually the insurance party will determine it. So the system tends to be less transparent for both parties.
Another drawback will be known once you take out the investment insurance and on the way you decide to quit. When you can no longer pay the premium, the investment you have collected will be forfeited or lost instantly. Therefore, if you stop then you will lose. Meanwhile, if you decide to stay advanced, you have to bear the cost of premiums per month that the number is quite large. While on the other hand, there are so many needs that must be met with income that is not too big.
In short the Disadvantages of Investment Insurance are:
- The premium will be more expensive than buying the product separately
- Benefits received are smaller
Example: for men aged 30 years, UP (life insurance) 2M buy unitlink, premium per year = 55 million. If you buy pure life insurance itself, the premium per year = 4.5 million. Far difference?
- From the first year to the fifth year usually most unitlink products take the portion of insurance premiums, fees, agent commissions. So the new investment portion reaches 100 percent in the 6th year (although now there are many unitlink that has changed this concept)
- We have no information what kind of investment in detail, and can not choose his own investment
- The cash value formed in the early years is very small, even smaller than the paid premium.
The Right Solution In Choosing An Investment Insurance
You could have a loss when taking investment insurance, therefore to avoid unwanted things, then you should choose term insurance. With term insurance, you can pay a premium with a lighter amount than investment premiums whose numbers tend to be large. So the rest of the premium payment can be used to invest. Although a little more complicated, but this way is considered more secure when they want to have insurance and invest. Basically the separation between insurance and investment is the right solution because after all, insurance and investment are two different goals. If you want insurance and investment, you can use term insurance or mutual funds.