Unit Link is a combination of investment and insurance.

It's often scammy.

The reason it's scammy is because by combining it with insurance, the company can charge much more and the customer may not notice.

Imagine if expected coverage is $50 or if insurance with similar coverage is sold for $50. Imagine if I tried to sell that for $5k. Any customers will know it's heavily overpriced and don't buy. Because customers know that no money is invested, the customer knows that all $5k will be gone for something that's just worth $50 and won't buy.

However, if the premium is $10k, where $5k of the money goes to fees, customers may not know how much money of the $5k is truly invested. The company can simply obfuscate the fee, the agent can simply mislead customers that there is no fee.

This is one sample https://www.kaskus.co.id/post/5e807230af7e9310bd3f3123#post5e807230af7e9310bd3f3123

Another way the customer can know if they're being had is by analyzing the future value of the investments.

The insurance agents will tell customers that the stuff is profitable in long term but not in short term. Unless the customer uses excel and stuff they wouldn't easily know that their investments value is much lower whether it's in the long term or short term.

I've heard that due to this Unit Link is illegal in Australia. Is it true? Where is the law?

1 Answer 1


It's hard to prove a negative but I don't think they would be illegal

They just aren't sold in

It appears that unit-linked insurance plans are a relatively recent investment product developed in and still largely concentrated in India.

They appear to be somewhat similar to life assurance policies which used to exist in Australia but don't anymore. The reason for their disappearance was the introduction of mandatory superannuation for all Australian employees which, for most, is their largest single investment outside their house. These have life insurance (not assurance) policy options within them and they effectively killed the life assurance market.

I don't think unit-linked insurance plans would be illegal providing they complied with all Australia's prudential regulations - I just don't think there's a market for them.

  • "their largest single investment outside their house" If they even own a house, rather than renting.
    – nick012000
    Dec 25, 2020 at 14:41

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