During low interest period, the guaranteed returns from insurance company like Endowment Insurance will generate lower returns accordingly. That happens because the insurance company has taken some parts of our paid premium to invest in Government Bond and then its returns declined due to low interest. If this downturn still remains unchanged, the insurance company may not be able to guarantee the returns. That’s why they’ve launched Unit Linked Insurance as an alternative that offers the policyholders both insurance coverage and investment exposure in equities or bonds at an acceptable risk level under a single integrated plan.

Unit Linked Insurance offers life protection including a chance to get higher investment returns. Unit Linked premium paid by the assured is divided into two parts; the first premium will be deducted to pay the life insurance fee, after that the remaining premium will be taken to invest in Mutual Fund in a portion chosen by customers. 

This article will elaborate Unit Linked category and how to select the best one.

Unit Linked Insurance is divided into 2 categories as follows:

1. Single Premium

Be reminded that Unit Linked Insurance comprises 2 premiums which is Regular Premium and Top-up Premium.

The single premium is a one-time payment of a Regular premium in which the assured will get insurance capital of about 110 - 150% of the Single premium. Regular premium normally starts at minimum of 100,000 Baht (some minimum Regular premium cost higher) and offers lifetime coverage (until the age of 99) or as long as redemption value is enough to deduct other expenses as stated in Insurance Policy Table.

This type of premium doesn’t emphasize coverage. For example, if you pay the premium at 100,000 Baht, your insurance capital will be 110,000 – 150,000 Baht (as stated in each type of insurance). If coverage is low, the insurance fee will follow accordingly. Thus, a part of money taken to investment will be higher than other Unit Linked that generates wealth accumulation, and life coverage will also be given at a certain level but you can’t buy an additional contract.

If the assured want to invest more, they can do that by paying an additional premium but won’t receive any coverage. To put it simply; pay a Regular premium, get coverage but an additional premium must be paid, and no coverage is given (but have money left for higher investment).

2. Regular Premium

This insurance requires regular payment of Regular premium and the assured can choose the term of payment; annually, 6 months, 3 months, or monthly, and they’ll receive an amount of insurance capital equal to Regular premium. The insurance company will state the lowest insurance capital such as minimum sum insured at 200,000 Baht and no less than 5 times of Regular premium. We can choose the higher sum assured than the minimum if we need high coverage. However, insurance expenses will be high according to high insurance capital, and the proportion of investment money will also drop. If the assured want to invest more, they can do that by paying additional insurance premiums.

Good things about Regular Premium:

to offer high coverage and flexibility by increasing or decreasing insurance capital to fit your needs in each period of time without a time limit. You can adjust the premium but it must align with the terms and conditions of life insurance capital, and you may also buy an additional contract.