The choice between traditional and investmentsavings life insuranceis an important step in financial planning.Depending on your risk profile, long-term goals and return expectations, one of the two types may be more suitable for you.In this article, we will look at the main differences between traditional and investment life insurance, their features, the advantages and disadvantages of both types of insurance, and how to make an informed choice.

Main features of traditional savings insurance

Traditional life insurance with a savings element is a conservative, security-oriented product.What this type of policy includes:

Guaranteed amount at maturityor upon the occurrence of an insured event;
Low but secure income(usually between 1% and 2.5% per year);
Fixed term– most often between 10 and 30 years;
Financial protection of the familyupon death or disability;
No direct investment in the market– funds are managed conservatively by the insurer.

It is suitable for individuals who want stability, minimal risk and clarity about future financial results.

How does investment life insurance work?

Investment insurance(Unit-linked) combines insurance protection with the possibility of capital markets returns.Basic working principles:

Part of the contributed funds are investedin selected funds;
Profitability is not guaranteed, depends on the market;
The client chooses an investment strategy– conservative, balanced or aggressive;
Possibility of higher profitabilityunder good market conditions;
Flexibility when switching funds or contribution increase.

This type of policy is suitable for people with higher financial literacy and a moderate to high risk appetite.

инвестиционна застраховка и традиционна живот разлики

⚖️ Differences between traditional and investment life insurance

Type of insurance	Advantages	Disadvantages
Traditional	Guaranteed amount;Security;Lower risk	Lower profitability;Limited flexibility
Investment	Potentially high yield;Opportunity for growth	Risk of loss;Fees and no guaranteed profit

The differences stem mainly from capital management – whether it is protected by guarantees or exposed to market fluctuations.

How to choose the most suitable option?

When choosing between the two options, consider the following factors:

Do you have a high tolerance for risk?
- Choose investment insurance.
Are you looking for a guaranteed result?
- Prefer a traditional policy.
Are you planning long-term investments for growth?
- The investment version provides this option.
Do you want predictability and security?
- Traditional insurance offers just that.

💡Tip:A combination of both types is also possible through mixed police products.

разлики между традиционна застраховка и инвестиционна живот

Traditional savings insurance offers stability and predictability, while investment insurance provides greater returns at higher risk.The right choice depends on your financial goals, time horizon and attitude towards market fluctuations.Consultation with an insurance consultant is recommended before entering into any contract.

Criterion	Traditional insurance	Investment insurance
Profitability	Guaranteed, low (1–2.5% p.a.)	Potentially high but variable
Risk	Very short	Moderate to high
Flexibility	Limited - fixed conditions	High - fund selection, change of contributions
Guidanceof funds	Managed by the insurer	Customer Managed (Indirect)
Who is it for?	Conservative savers	People with higher financial literacy and risk appetite
Guarantees	Yes - Amount Guaranteed at expiry	No - the yield is not certain
Fees and commissions	Lower, usually fixed	Higher related to investment management
Investmentelement	There isn't	Yes – investments in funds
Profit in good markets	Limited	Possibility of high profitability

What are the differences between traditional and investment savings insurance?

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