Investment in Takaful

Under most circumstances, your insurance policy (regardless from which Agency) will include a small portion of your contribution into an investment vehicle. Prudential clients for example will have their insurance linked investment managed by Eastsprings Investments. On the other hand, all of Takaful's investment funds are managed internally by their Investment Division.

While insurance is a must for everyone, I must remind that one should not compare the performance of an insurance linked investment fund with that of a unit trust fund. Don't compare apples with oranges. A unit trust investment is to ensure capital growth while investing into an insurance linked investment fund is to ensure that there is additional reimbursement if an unwanted or an unforeseen circumstance were to befall upon you.

Honestly, Malaysians in general are quite oblivious to the type of insurance linked investment fund they invest in. While many dig deep into the coverage of the insurance policy, I believe almost none would inquire about the type of investment fund their contribution is being invested in. I remember when I first bought an investment linked insurance policy about 8 years ago. Apart from the coverage, all I was concerned about was to ask my insurance agent to select the investment fund with the highest return. The word "Risk" never came across my mind. How naive I was then!