With investment-linked policies, premiums paid are used to buy units in one or more funds offered by the insurance company. These funds are similar to unit trusts where investors' money is pooled and invested in various short and long-term investment facilities. Some examples of these facilities include listed equities of strong companies and fixed income securities.

The price of the units will depend on the investment performance of the managed fund. The benefits payable will depend on the price of the units prevailing at the time of surrender or death or maturity of the policy.

In addition to the cash value of the units, investment-linked policies usually provide a minimum guaranteed death benefit.