unit link
Also called: asuransi unit link
An insurance product that combines life protection with investment, and its value can go up and down.
What it means
Unit link is an insurance product that combines risk protection with investment in the form of mutual fund units. Part of the premium is used to pay insurance costs, and part is invested according to the customer's choice. The investment value rises and falls with the market, so it is not guaranteed to stay fixed. Therefore, unit link carries investment risk in addition to insurance benefits.
Why it matters for families
Unit link is often sold as a complete package, even though acquisition costs can be quite large in the early years. If the family does not understand the cost structure and risk profile, the investment value may be smaller than expected when needed. This product should be chosen after basic protection needs are met. Make sure the purpose of buying is protection, not merely chasing returns.
Example
Suppose someone pays a premium of Rp1 million per month for a year. Part is deducted for insurance costs and management fees, and the rest buys investment units whose value can rise or fall. After a year, the cash value is not necessarily equal to the total premiums paid. This figure is only an illustration.
Common misunderstanding
Many people think unit link is the same as savings that are sure to grow. The correction: unit link value follows investment performance and can fall, so it cannot be equated with a deposit.