Consumption allocation is used to finance the consumption needs of food, clothing, and house. Saving has its function just-in-case, and investment is to cultivate owned assets. And lastly, everyone is usually fortifying the risk with insurance.
The problem is, investment and insurance products continue to grow, in line with the wishes of the users of the product. Including the product mixed of various types of investments and insurance. For example, various types of mutual funds; insurance plus savings; insurance plus investment, and the combination of unit-linked products can be assumed that such interbreeding.
Mutual fund is basically a wide range of financial investment products, such as stocks, bonds, money market securities, etc. There are equities, fixed income mutual funds, mixed funds, as well as money market funds.
While unit-linked identified as life insurance product that is combined with investment. Thus, when it is the time to pay the insurance premium, some portion of the premium is invested into various securities, known as units. Management of investment funds is done separately by fund managers.
The difference is in mutual funds, all customers' funds have been invested in the product since its inception. In other words, the funds placed at once when buying mutual funds.
In unit-linked product, insurance premiums that have been paid in stages are invested. In short, the mutual funds, investments are made at the same time, the unit-linked investments are made in stages.
Investment objectives will answer which one is better because it fits with the needs. If the customer already has a standalone protection, investing directly in mutual funds can be an alternative if there is still fund available. If you want to have protection plus investment together, and don't have much enough fund available, unit linked can be an option.
But the selection of the two options above should be appropriate to your needs and abilities. Basically, the management of mutual funds and unit linked, in the aspects of the investment, is managed by fund managers. So the success of investments in both of these products relies on the expertise of fund managers in selecting investment products.
So consider carefully beforehand the institution issuing of mutual fund products as well as unit-linked. After that, examine carefully the type of investment product to be purchased. In order we will not to regret in the future.
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