What are the benefits and risks of investing in a mutual fund issued by an insurance company?

There have been a lot of issues in the news these days regarding the trustworthiness of insurance companies. Are these instruments regulated by the government? How are these funds different from those issued by banks? My aunt is trying to sell me these funds and I want to know the whole picture.

Wow, these are really good answers. Thanks guys.

You answered your own question, though you may not have realized it.
Most institutions pay salespeople a commission to push off certain products. These products are usually of no benefit to you. If you are interested, you want a no load, no commission mutual fund. In my opinion, a great place for this investment is www.vanguard.com You pay a percentage of the money you make each year. For example, if your mutual fund portfolio is 10,000 they take about .25% of that, or twenty five dollars.
Sorry that your aunt is trying to take advantage of you, but you need to tell her that you don't want to buy anything from a family member. I've seen friends and family ripped apart from such trivial things as borrowing a hundred dollars, much less investing in mutual funds.

Check the historical rates of the returns, ensure they are fit for your level of risk..if you are low tollerance go for primarily t-bills, bonds, and growth/dividend funds. To be honest I've actually had much better luck with my insurance company managing my mutual funds portfolio than the Bank (that I work for).

Most insurance companies issue annuities, not mutual funds. Annuities are poor investments for the overwhelming majority of investors, but not because of any dishonesty. They simple have high expenses and mediocre returns. You can read more about them here: http://www.quitecontrarian.com/intro-to-...

They are typically sold hard, because the expenses (and thus the commissions) are so high. Don't be fooled.

Want to guarantee that you'll beat approximately 9 out of 10 mutual funds every year? Just buy an S&P500 index fund. If you're willing to spend time researching, on the other hand, spend it on individual stocks.

Risks often relate mostly to the expenses you might end up paying for the investment. Ask if the mutual fund is truly a mutual fund or an annuity issued by an insurance company. Insurance companies do offer both; however annuities typically cost twice as much over time invested, and may have higher surrender charges.

May not be necessarily a bad thing, if you don't have a problem paying extra for features. Just make sure that they are features that you need.

Trustworthiness is often an issue of the agent or broker selling the product, not so much the company. Annuities pay much higher broker commissions than their true mutual fund twins. Ask many questions before investing, typically relating to expenses, and features. Get a prospectus.