The difference between General Insurance & Unit Link Life Insurance

Insurance is one way to protect yourself and your property from unexpected risks. There are various types of insurance available on the market, but among these there are two main types of insurance that are most talked about: general insurance and unit linked life insurance. These two types of insurance have different characteristics and benefits, therefore, it is important to understand the differences between the two.

1. General insurance

General insurance is a type of insurance that protects you from financial losses caused by certain risks, such as accidents, fires, floods, theft, and so on. If you buy a general insurance policy, then you have to pay premiums regularly, and in the event of an event covered by the insurance policy, the insurance company will pay the claim to you.

There are several types of general insurance, such as motor vehicle insurance, home insurance, travel insurance, and so on. Each type of general insurance has different characteristics and benefits, but the goal remains the same, which is to provide you with financial protection in the event of an unwanted risk.

2. Unit Link Life Insurance

Unit linked life insurance is a type of insurance that combines life insurance and investment. In unit linked life insurance, some of the premium you pay will be used to pay for life protection, while the rest will be invested in mutual funds or other investment products. In the event of a risk covered by the policy, the insurance company will pay claims to you or your family, while at the same time, the value of your investment can also increase along with market performance.

Unit linked life insurance has the advantage of providing both life and investment protection. In addition, unit linked life insurance also provides flexibility in choosing the type of investment that suits your needs and risk profile.

The Difference Between General Insurance and Unit Linked Life Insurance

Although both are types of insurance, general insurance and unit linked life insurance have significant differences. Here are the differences between the two:

1. The main purpose

The main purpose of general insurance is to provide financial protection in the event of certain risks. Meanwhile, the main goal of unit-linked life insurance is to provide both life and investment protection.

2. Investment

General insurance does not have an investment element, so the premium you pay is fully used to pay the premium. Meanwhile, unit-linked life insurance combines elements of investment, so that part of the premium you pay will be invested in investment products such as mutual funds or other investment products.

3. Premium payment policy

Premium payments in general insurance are usually made periodically, such as monthly, yearly or other periodic. Meanwhile, for unit-linked life insurance, the premium payment policy is more flexible, where you can pay the premium periodically or in one payment.

4. insurance period

The insurance period for general insurance is usually limited, where the policy is valid for a certain period, for example one year or three years. After the insurance period ends, you must renew the policy if you want to remain protected. Meanwhile, in unit linked life insurance, the policy is valid for your lifetime, and you can extend the policy throughout your lifetime.

5. Payment of claims

Payment of claims on general insurance is usually done in a lump sum, that is, the insurance company pays the claim in one payment. Meanwhile, for unit-linked life insurance, claim payments can be made in the form of lump sum payments or in the form of periodic installments.

Conclusion

The two types of insurance, namely general insurance and unit linked life insurance, have different characteristics and benefits. General insurance provides financial protection in the event of certain risks, while unit-linked life insurance combines elements of both life protection and investment. It is important to understand the differences above before choosing the type of insurance that suits your needs and goals. Therefore, be sure to carefully read the insurance policy before buying insurance, and consult an insurance agent or financial professional before making a decision.