These days, a typical insurance company offers much more than traditional general or life insurance cover.
Investors are also offered a range of investment-linked insurance products designed to combine the benefits of insurance protection with the upside potential of investment in a range of markets.
For many customers, the insurance coverage contained in their investment-linked product might be their main insurance, while for others it might be considered a supplement. A leading factor in the success of investment-linked insurance products is that, unlike traditional life insurance, these give the policyholder a choice in the way the money is invested, typically in a range of funds managed within the insurance company's group.
As the name suggests, investment-linked products are designed around an insurance and investment theme. They can range from an instrument primarily offering insurance cover to an investment vehicle with a thin layer of insurance.
Responding to demand from the public for regular savings vehicles, many insurers offer investment-linked products with premiums that can be paid monthly. These have proved highly popular with investors.
Warren Lee, chief operating officer of AXA China Region Insurance, said Hong Kong's Mandatory Provident Fund (MPF) had contributed to the growth in popularity of investment-linked products.
'The MPF has been very helpful in promoting education about investment. The market is evolving toward the savings side of the products,' he said.
