Investment insurance or known by the name of Link Unit is still an excellent product for many life insurance companies in Indonesia, but over time people began educated that this product is a product that is expensive or has a high component costs, impact on the relatively slow growth of investment funds its customers. Is this true?, Then why are these products still continue to be available in the market?, Why do people still flock to buy this product?, Let us discuss objectively the advantages and disadvantages of this unit-linked products.
First, before discussing the advantages, to be seen beyond the cost of insurance costs (the cost of Mortality of magnitude depending on sex, age of entry as well as the magnitude of the sum assured, the policy holder health conditions also affect the magnitude of this cost), following is an explanation on the unit cost of link:
1. Administrative Costs
These costs will continue to be charged for an insurance policy is still active (the insurance is still valid).
2. Cost Allocation of Premiums
Insurance companies that charge these fees in advance prior to and any funds into the investment portion. This fee is generally 5 percent of funds invested and there is also a method that uses bid-offer price of the incoming funds will be shared with the selling price (offer price) and funds out or withdrawn by the customer will be multiplied by the purchase price (bid price) . The excess of the bid-offer price is usually a 5 per cent (generally calculated from the offer price). For customers who want to attract investment from link units that use the method absolute bid-offer price must calculate the rate of growth that is happening since the funds came in, minus the difference in bid-offer price. Read more
