Unit-linked life insurance: definition and advantages and disadvantages
Unit-linked life insurance is a link between a fund investment and life insurance. It, therefore, combines capital investment with the protection of relatives. In contrast to capital-forming life insurance, insurers invest the contributions in various funds such as equity, pension, or real estate funds. However, the policyholder alone bears the investment risk.
At the end of the contract period, the customer receives the value of the existing capital investment. If the market is good, you can make a profit. However, the opposite is also possible: If things are not going well for the system at the end of the contract, there is a risk of financial loss.
Advantages of unit-linked life insurance
- consistent contributions
- offers higher return opportunities than classic life insurance
- The choice between equity, bond, and real estate funds
- Possibility to change the fund during the term of the contract, often for a surcharge
Disadvantages of unit-linked life insurance
The customer bears the risk of fluctuating share prices and total loss himself guaranteed interest as the value of the policy depends on the state of the stock markets addition to acquisition and administration costs, there are also fund costs and costs for risk protection in the event of death anyone who transfers the contribution monthly instead of annually pays an additional installment fee
Which type of life insurance is worthwhile depends on the individual goals and needs of the insured person – find out more or get extensive advice on which variant suits you best
Term life insurance: definition and advantages and disadvantages
With term life insurance, known as risk LV for short, only the risk of death – ie your own or another person – is insured. A risk life insurance does not serve the insured person himself during his lifetime, but rather the financial security of the family or other surviving dependents.
After the death of the insured person, the insurer pays out the sum insured contractually specified at the time of the conclusion of the contract to the surviving dependents or another person named in the contract. This can be used to secure a loan repayment or the education of the children, for example.
Benefits of term life insurance
- affordable due to low premiums
- protects relatives with high death benefits
- Contributions are tax-deductible as pension expenses
- Insurance cover that can be adjusted at a later date if required
- additional capital investment for retirement provision can be freely selected if required
Two Verti advantages for more security:
1. With our term life insurance, you can rely on guaranteed premiums. 2. With our optional accidental death supplementary insurance, the payout increases by 50 percent in the classic variant and 100 percent in the premium variant.
Disadvantages of term life insurance
- requires health check
- is not suitable for your own pension scheme
- higher contributions for people with pre-existing conditions or an unhealthy lifestyle, such as smokers