Unit-Linked is an investment product in an insurance cover. Therefore, the client's life is most often insured for 101% of the value of the underlying asset. Unit-Linked products do not offer a 100% refund guarantee. If “aggressive” investments are unsuccessful, the client will get less than he invested in the amount of market losses. If they turned out to be profitable, then this money would also be included in payments.
In investment insurance, most of the funds are invested in aggressive financial instruments, not conservative ones, but in international practice, the distribution of funds in Unit-Linked depends on which strategy the client chooses. If it is a policy with insurance coverage of 101-105%, up to 95% of the insurance premium can go to risky instruments. If the insurer assumes large obligations, for example, guarantees payments in case of disability, then the percentage allocated to risky instruments decreases. The LIC client is given the opportunity to take a more active part in the portfolio formation by choosing where exactly to invest in his “aggressive” part and in what proportions.
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