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3 Tips to Maximize Insurance for Investment

Investment is not only stocks, mutual funds, deposits, gold, and property. It turns out that insurance whose main purpose is protection or self-protection can be used as an investment.


In order for investment in the form of insurance to be maximized, the following tips can be done:

Unit link insurance lyrics

Unit-linked insurance is a type of insurance that combines two products, namely insurance and investment products. So, unit-linked insurance is an insurance product that provides both protection and investment benefits.

Unit link insurance is perfect for those of you who like long-term investments and intend to increase wealth. You will get two benefits at once in one policy.

In the benefits of this investment, the insurance company guarantees cash if the customer pays premiums consistently. You can choose investments based on your needs and risk profile.

It can be in the form of equity mutual funds, mixed mutual funds, fixed income mutual funds, money market mutual funds, and sharia securities. The premium you pay is partly used to pay for protection products and partly placed on investment products of your choice.

In addition to the benefits, unit links also have risks. One of them is a decrease in investment value when unit link insurance matures, making you lose.

Extend the coverage benefits

Insurance is not an investment, but it is these long-term benefits that make it an investment. Same for the future. The more long-term you are insured, the more sum insured you will receive.

The benefits of insurance coverage are basically limited. It is better to expand the benefits so that more benefits you can get.

For example, health insurance for ordinary illness, is extended with critical illness coverage benefits. Or car insurance for accidents only, extended with natural disaster coverage benefits.

This extended benefit will cost you an additional premium. But with the expansion of these benefits, you will get complete peace of mind in the long run. One of them is in minimizing losses from the risks that occur.

Orderly pay premiums

The last tip is to orderly pay premiums so that the insurance remains active or canceled. That way, you can enjoy the benefits listed in the policy.

If in fact it is not active because you are late or in arrears in premiums, then your rights are automatically revoked. You cannot make a claim for the losses suffered.

For this reason, discipline allocates money after receiving salary for payment of insurance premiums. If you need to use auto debit, it will be automatically deducted from your account balance for insurance premiums.

Advantages and Disadvantages of Investment Insurance

Insurance as well as investment known as unit link has advantages and disadvantages, including:

Advantages of Investment Insurance

1. Benefits can be extended at any time

Investment insurance has the advantage that its benefits can be expanded at any time. Can be directly adjusted to your needs and financial condition. With one investment insurance product, you can get multiple benefits.

2. Long coverage period

Insurance with investment benefits offers a longer coverage period than other insurances. The coverage period is up to 100 years.

This is why investment insurance can be used as a long-term investment. But again, the coverage period depends on the policies of each insurance company.

3. The premium is not forfeited

If during the policy contract period there is never a claim, then the premium paid is not forfeited. The premium will be returned according to company regulations.

This is different from pure insurance. If there is no claim during the contract period, the premium will be automatically forfeited.

4. Increase investment value

For those who have invested in other instruments, the presence of this insurance automatically adds to the value of your investment. This value will continue to increase along with the portfolio's performance.

Therefore, buy investment insurance in a healthy company that is officially registered with the Financial Services Authority (OJK). In addition, having good credibility in managing investment insurance funds to avoid fraud that can drain your money.

5. Funds can be withdrawn at any time

Investment insurance is very flexible. The money or premium allocated to the investment can be withdrawn at any time. You can also add funds.

You are allowed to transfer your investment money to other instruments. This withdrawal or transfer does not necessarily make the insurance status inactive or reduce the benefits you get.

6. Can take time off from obligations

Unlike pure insurance, if the premium is not paid, the policy status can be inactive. In investment insurance, you can take time off from paying premiums for certain reasons.

Even though you are on leave, you can still enjoy the benefits and get some information about the investment insurance product in question.

7. Easy to invest

You don't have to master investment science to buy investment insurance products. This is because the money invested will be managed by an investment manager appointed by the insurance company. So, you just sit back and enjoy the results.

Disadvantages of Investment Insurance

1. The protection value is less than the maximum

The allocation of premiums for insurance and investment automatically reduces the value of the protection you get. If in pure insurance you can get protection of IDR 500,000 per day, in investment insurance the value can only be IDR 250,000 per day.

2. Premium fees are more expensive

Given the dual benefits, the premium paid is also more expensive than pure insurance. The lowest premium cost for unit link insurance is around IDR 450,000 per month. As for pure insurance, there is still a premium of around Rp. 200,000 to Rp. 300,000 per month.

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