Risk transfer in private insurance unit-linked products

by Matteo Di Rienzo

Unit-linked insurance policies (ULIPs) represent a distinct category of life insurance products that integrate a significant investment component. Their defining characteristic is the linkage of their value to the performance of units of a fund, making them resemble financial products while retaining the framework of insurance. ¹ The favourable legal, regulatory and tax treatment of ULIPs as life insurance products makes them an appealing alternative to purely financial investment options. Such favourable treatment is justified by their alignment with the social security objectives of insurance and pension products, which aim to provide coverage against life events and support retirement savings.