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A Comparative Analysis Between Unit-Linked Life Insurance And Other Alternative Investments

Author

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  • CRISTINA CIUMAS

    (DEPARTMENT OF FINANCE, FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION, BABES-BOLYAI UNIVERSITY, CLUJ-NAPOCA, ROMANIA)

  • DIANA-MARIA CHIS

    (DEPARTMENT OF FINANCE, FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION, BABES-BOLYAI UNIVERSITY, CLUJ-NAPOCA, ROMANIA)

Abstract

The unit-linked life insurance has two important components: protection and investment. The protection component refers to the insured sum in case of the occurrence of insured risks and the investment component refers to the policyholder’s account that represents the present value of the units from the chosen investment funds.These financial products invest most of the premium paid by the insured person in the funds managed by the insurance company or an external administrator and the lower part of the premium is intended to cover the insured risk (death, disability, etc). An important component of the activity carried out by the insurance companies is the investment of the premiums paid by policyholders in various types of assets, in order to obtain higher yields than those guaranteed by the insurance contracts, while providing the necessary liquidity for the payment of insurance claims in case of occurrence of the assumed risks. This research contributes to the existing literature regarding the study of investment alternatives, with an exclusive focus on the investment in unit-linked life insurance. A special place in this study is the presentation of investments in unit-linked insurance versus other types of financial investments: deposits, treasury bills, shares (BET), currency (EURO) and gold.

Suggested Citation

  • Cristina Ciumas & Diana-Maria Chis, 2015. "A Comparative Analysis Between Unit-Linked Life Insurance And Other Alternative Investments," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 27-36, June.
    • Handle: RePEc:cbu:jrnlec:y:2015:v:3:p:27-36
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    References listed on IDEAS

    as
    1. Li, Jing & Szimayer, Alexander, 2011. "The uncertain mortality intensity framework: Pricing and hedging unit-linked life insurance contracts," Insurance: Mathematics and Economics, Elsevier, vol. 49(3), pages 471-486.
    2. Marius Gavriletea, 2009. "The Future of Investment Done by Unit Linked Insurance in Romania," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 5, pages 819-830.
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