What is investment-linked insurance? How is it different from the traditional insurance products?
Investment-linked products generally provide both protection and investment opportunity to the policyholders. Unlike the traditional insurance products, as the name suggests, investment-linked insurance gives the policyholders a choice to choose their preference of investment according to their risk appetite, preference, age and so forth.
However, insurance companies set up so many types of investment funds for us to choose from. Which one should we choose so that we can achieve our financial objective?
Generally, there are three broad types of investment strategies that an investment fund will adopt:
1) Bond/Fixed income fund:
Fixed income fund invests in Malaysia government securities, corporate bonds and so on. Fixed income fund yields a rather consistent and less volatile return. Given its lower risk, the returns usually only ranges around 4 to 6 percent per year.
2) Equity fund
Equity fund invests in the stock market. It might yield more than 10% of return in a year, some even higher. However, the returns are usually very much volatile. In bad years, it could give negative returns as well.
3) Balanced/Blended fund
Balanced fund has a well mix of equity and fixed income exposure. It invests in both equity and fixed income. As a result, it has moderate risk exposure and an average returns to the investors.
Investment-linked products generally provide both protection and investment opportunity to the policyholders. Unlike the traditional insurance products, as the name suggests, investment-linked insurance gives the policyholders a choice to choose their preference of investment according to their risk appetite, preference, age and so forth.
However, insurance companies set up so many types of investment funds for us to choose from. Which one should we choose so that we can achieve our financial objective?
Generally, there are three broad types of investment strategies that an investment fund will adopt:
1) Bond/Fixed income fund:
Fixed income fund invests in Malaysia government securities, corporate bonds and so on. Fixed income fund yields a rather consistent and less volatile return. Given its lower risk, the returns usually only ranges around 4 to 6 percent per year.
2) Equity fund
Equity fund invests in the stock market. It might yield more than 10% of return in a year, some even higher. However, the returns are usually very much volatile. In bad years, it could give negative returns as well.
3) Balanced/Blended fund
Balanced fund has a well mix of equity and fixed income exposure. It invests in both equity and fixed income. As a result, it has moderate risk exposure and an average returns to the investors.
Some of the major investment-linked fund provided by the companies are as below:
PRUlink Bond
PRUlink Bond Fund is an investment-linked insurance fund established in Malaysia. The Fund aims to provide medium to long-term accumulation of capital by investing in selected fixed interest securities, corporate bonds and fixed deposits.
PRUlink Equity Fund
PRUlink Equity Fund is an investment-linked insurance fund established in Malaysia. The Fund aims to maximise returns over the medium to long term by investing in high quality shares listed on the Kuala Lumpur Stock Exchange.
PRUlink Managed Fund
PRUlink Managed Fund is an investment-linked insurance fund established in Malaysia. The Fund seeks to maximize returns over the medium to long term by investing in shares and fixed interest securities through PRUlink Equity Fund and PRUlink Bond Fund and in any other PRUlink funds that may become available in the future.
Great Eastern LION Fixed Income Fund
Great Eastern LION Fixed Income Fund is an investment-linked insurance fund established in Malaysia. The Fund's objective is capital preservation by investing in government securities, corporate bonds and money market securities.
Great Eastern LION Progressive Fund
Great Eastern LION Progressive Fund is an investment-linked insurance fund established in Malaysia. The Fund seeks to maximize capital appreciation over the medium to long-term while reducing risk through a diversified portfolio. The Fund invests primarily in equities listed on the Kuala Lumpur Stock Exchange and short term money market
Great Eastern LION Balanced Fund
Great Eastern LION Balanced Fund is an investment-linked insurance fund established in Malaysia. The Fund seeks a balanced portfolio by investing in income generating high dividend yield stocks and fixed income securities comprising convertible debt securities, redeemable debts securities and government-backed bonds.
AIA Fixed Income Fund
AIA Fixed Income Fund is an investment-linked insurance fund established in Malaysia. The Fund's objective is to provide a stable income. The Fund invests in fixed income securities and money market instruments in Malaysia.
AIA Equity Plus Fund
AIA Equity Plus Fund is an investment-linked insurance fund established in Malaysia. The Fund's objective is to maximize medium to long-term growth of capital and income. The Fund invests in a portfolio of well-managed large-capitalized companies that offer above average growth potential.
Information obtained from Bloomberg
PRUlink Bond
PRUlink Bond Fund is an investment-linked insurance fund established in Malaysia. The Fund aims to provide medium to long-term accumulation of capital by investing in selected fixed interest securities, corporate bonds and fixed deposits.
PRUlink Equity Fund
PRUlink Equity Fund is an investment-linked insurance fund established in Malaysia. The Fund aims to maximise returns over the medium to long term by investing in high quality shares listed on the Kuala Lumpur Stock Exchange.
PRUlink Managed Fund
PRUlink Managed Fund is an investment-linked insurance fund established in Malaysia. The Fund seeks to maximize returns over the medium to long term by investing in shares and fixed interest securities through PRUlink Equity Fund and PRUlink Bond Fund and in any other PRUlink funds that may become available in the future.
Great Eastern LION Fixed Income Fund
Great Eastern LION Fixed Income Fund is an investment-linked insurance fund established in Malaysia. The Fund's objective is capital preservation by investing in government securities, corporate bonds and money market securities.
Great Eastern LION Progressive Fund
Great Eastern LION Progressive Fund is an investment-linked insurance fund established in Malaysia. The Fund seeks to maximize capital appreciation over the medium to long-term while reducing risk through a diversified portfolio. The Fund invests primarily in equities listed on the Kuala Lumpur Stock Exchange and short term money market
Great Eastern LION Balanced Fund
Great Eastern LION Balanced Fund is an investment-linked insurance fund established in Malaysia. The Fund seeks a balanced portfolio by investing in income generating high dividend yield stocks and fixed income securities comprising convertible debt securities, redeemable debts securities and government-backed bonds.
AIA Fixed Income Fund
AIA Fixed Income Fund is an investment-linked insurance fund established in Malaysia. The Fund's objective is to provide a stable income. The Fund invests in fixed income securities and money market instruments in Malaysia.
AIA Equity Plus Fund
AIA Equity Plus Fund is an investment-linked insurance fund established in Malaysia. The Fund's objective is to maximize medium to long-term growth of capital and income. The Fund invests in a portfolio of well-managed large-capitalized companies that offer above average growth potential.
Information obtained from Bloomberg