Investment Insurance, Here are The Advantages and Disadvantages

The definition of investment insurance is an insurance product that combines the two benefits of insurance and investment. This product is able to provide financial protection benefits as well as benefits from the insurance used. Investment insurance is a product that can provide two benefits at once. Even though it seems profitable in one use, you still have to realize that this profit is always followed by investment risks that could come. Basically, every financial product always has its advantages and disadvantages. To find out the meaning of investment insurance more clearly, here are the advantages and disadvantages.

Definition of Investment Insurance

Investment insurance is a product of unit linked insurance. Where the premium paid by the insurance holder will be allocated to two parts, namely the basic premium for protection and investment premium. The insurance company will manage the premium according to the type of investment the consumer chooses. The investment instruments that can be used include stocks, time deposits, money markets, certificates of deposit, SBI, Debt Acknowledgment Letters; Commercial Paper, bonds with a maturity of less than 1 year, and many more.

Advantages of Investment Insurance

Currently, many people are starting to look at investment insurance products because of the availability of the best plus investment insurance services as a modern financial solution. However, behind the benefits of a combination of insurance and investment products, it turns out that there are various other advantages of investment insurance products. Here are some of these advantages:

Provides additional protection

Investment insurance has various types of additional insurance products (riders) that users can add as needed. Well, this is a special attraction and advantage in the eyes of consumers. The reason is, with only one insurance product you can fulfill all the protection needs of the asset you have.

Premiums are not forfeited

Another advantage is that the premium paid will not be forfeited. This provision is clearly different from a pure soul investment, where if the contract period is not claimed, the premium paid will be forfeited.

The coverage period is longer

Investment insurance offers a longer coverage period than other insurance products. This protection product offers coverage for 75 years, 80 years, up to 100 years according to the policy of the insurance provider.

The benefits are manifold

As already mentioned in terms of investment insurance, this insurance service combines two benefits at once, namely protection benefits and investment benefits. So that it has become an advantage of investment insurance that the benefits obtained by users will be multiplied.

Weaknesses of Investment Insurance

In addition to the various advantages described above, investment insurance services also have a number of disadvantages that must be understood by you. This can be taken into consideration for those of you who will use insurance services. What are the disadvantages of investment insurance? Here's the review.

Investment benefits are not optimal

It is undeniable that the main benefit of investment insurance is the protection benefits provided by the insurance service itself. So that this causes the investment benefits obtained to be not as maximal as the original original investment product

Bigger premium

When compared to premiums for other types of insurance, investment insurance premiums will be much higher. Most likely this is caused by the need for premiums used as investment capital by the insurance company.

There is no guaranteed profit

When you choose the type of investment insurance, make sure you don't just think about the benefits you will get later. But also consider all kinds of risks that could arise, including no guarantee of profit. This rule rests on the principles of the investment world, where price fluctuations occur very frequently.

Low protection value

Because premium payments are allocated for 2 needs, this causes the value of investment insurance protection to be smaller.

Premium prices continue to increase

The next weakness that you have to understand is that the amount of premium issued will continue to increase every day.

So, do you understand the notion of investment insurance and its advantages and disadvantages? It turns out that investment insurance is indeed able to provide maximum protection for investments, while at the same time providing more profitable investment values if chosen correctly. However, do not underestimate the risks and possibilities that could occur from this investment service product.

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