Insurance and investment are financial products that are always present in financial planning.
The question now is, what is the difference between insurance and investment and which one should come first?
Some of the insurance products offered by insurance agents are usually insurance investments or simply a combination of two financial products with different benefits.
Insurance products still provide guaranteed protection against death or when you fall sick, while investment products provide additional fund management with a profit of between 15 to 30 percent per three years.
Insurance products like this that we know as unit-linked insurance products that combine the benefits of life and health insurance with investment in this case are mutual fund investments.
Difference between Insurance and Investment
These two products are different in terms of their benefits. When paying insurance premiums, you will only get protection without any additional funds from the premium paid, even if there is no claim or when there is a premium refund.
Meanwhile, by investing, you will get additional and deposited ones. The profit is not fixed and is influenced by several factors.
These two different products are combined in one product called insurance investment. In principle, the premium you pay to the company will be divided in two.
Some are deposited to pay your premiums, others are managed by an investment manager.
Is Insurance Investment Profitable?
Talking about insurance and investment at the same time is like riding a vehicle with a different purpose. That is, if you want to quickly get to one goal, then you have to put other goals aside.
When it comes to practical or not, insurance investment does provide convenience for you. With one product, you can get two benefits.
However, the benefits that you can get will not be maximized because the premiums and managed funds deposited are also not optimal.
The practical reason is that many people don’t think long. In addition, it could be due to the inability to understand the difference between investment and insurance.
Insurance combined with an investment like this is not without risk. When you decide to use existing funds to buy an investment-based insurance policy, it will affect the amount of premium that must be paid.
In addition, the potential profit from the paid investment cannot be maximized because the fund management is carried out by the investment manager.
If you are asked whether insurance investment is profitable or not, it depends on how you see it.
However, some insurance policy holders who are new to unit-linked products like this are actually turning to looking for more affordable premiums.
As for those who continue to do so because it is absurd because it has been quite a long time to pay a fairly large premium.
So, if you are looking for the best insurance, you may need to reconsider the insurance and investment schemes offered.
One solution to get more profit in investment, the most appropriate step is to separate it from insurance products, and vice versa.
If you want to get maximum protection from insurance with lower premiums, you can choose a pure insurance policy or term insurance.
Maximize Each Product Separately
Our knowledge about insurance and investment is still low. In order to get better results, of course, these two things are better separated because the benefits are not maximized if the two are combined.
If you decide to keep buying this type of policy, then you have a choice between conventional insurance investments or sharia insurance investments which give you more peace of mind.