Investment-linked Insurance Isn’t What You Think It Is

I have been paying for 10 years, where is my cash value?

Most people think investment-linked is like a mutual fund that gives you investment returns that you can withdraw.

Investment-linked insurance does not work that way.

First of all, you need to understand that insurance will increase in price as you age.

The price of investment-linked insurance is not affected by your age.

It is because the premium you paid is used to offset the future cost of insurance, hence if your plan is until 70 years old, the price you paid is calculated until it covers till 70 years old.

If you withdraw the money, it will either not cover till 70 years old or your policy will lapse because there aren’t sufficient funds to keep the insurance running.

But here are the advantages of buying an investment-linked plan:

1. If your credit card expires and you do not pay for the next few months, your insurance will still go on, because the cash value will pay for your insurance.
2. Compared to term insurance, the total amount you pay in investment-linked insurance is lesser because of the investment return you get from the plan.
3. You can customize your policy with the coverage you want.

The advantage of having an investment-linked policy outweighs the disadvantages of it. But just bear in mind that the purpose of this plan is for protection and not investment.