- What is an Investment Linked Product?
An investment linked product is a non-traditional life insurance plan.
It is a life insurance policy with an investment component linked to it. A portion of the premium is allocated to an investment or separate fund.
It is a policy that provides for life insurance where the account value at any time varies according to the performance of the separate fund chosen by the policyowner.
- What is a policyowner?
The owner of an investment linked policy is the policyowner. He is the party to the contract entitled to life insurance benefits and the fund value of his investment.
- What is Wealth Builder?
Wealth Builder is Insular Life's peso denominated, investment linked product which combines the benefit of savings, investment and insurance protection all in a single product. Only a single premium payment is required for a whole life coverage providing living and death benefits.
The single premium is to be determined by the policyowner. The single premium less its initial and insurance charges will be invested in separate funds in proportions defined by the policyowner. Performance of the underlying separate funds affects the living and death benefits.
- What are the available funds to choose from?
The separate fund or funds that are linked to this product can be either of the following:
- Fixed Income Fund
- Balanced Fund
- Equity Fund
4.1 Fixed Income Fund invests in debt obligations and debentures issued by corporations, or by government. These include government securities (e.g. issuances of the Bangko Sentral ng Pilipinas) and fixed income instruments issued by Philippine corporations.
This type of investment fund appeals mostly to conservative investors. If an individual desires a stable income from his/her investment over the medium term and, at the same time, is concerned about preserving the principal, he/she would certainly want to invest in the fixed income fund as this would tend t be less volatile than other types of investment funds.
His/her capital growth will mainly come from stable and predictable interest payments on debentures as well as term loans of prime-rated corporations and from virtually risk-free bond issuances of the government. Over the long-term, however, returns may not be as high as from the more aggressive types of funds.
4.2 Balanced Fund lets an individual enjoy the best of both worlds by simultaneously providing him/her with long-term growth and a steady income. It shall invest in prime rated stocks that are listed in the Philippine Stock Exchange (e.g. San Miguel, Ayala Corporation, Ayala Land, and PLDT) to give superior growth to his/her investment. At the same time, the fund's investment in government securities, bonds issued by, and term loans extended to, prime Philippine corporations, and short-term money market instruments provides greater stability in fund value as well as a balanced income stream.
An individual has a moderate appetite for risk, then this investment vehicle is most suitable for him/her. He/She is the type who wishes to avoid volatility of investing purely in equities but at the same time, does not want to give up completely on the long-term growth potential that it offers. He/She also looks forward to having part of his/her investment give him/her regular earnings through exposure in fixed income instruments. This fund will tend to deliver moderate yields and capital growth over the long term.
4.3 Equity Fund seeks to provide an individual with long-term total return and capital appreciation by investing primarily in dividend-paying shares of local companies with large capitalization and growth potential and which are listed in the Philippine Stock Exchange.
If an individual is looking for an opportunity to maximize returns on his/her investment, and has a high tolerance for risk, then this is the fund he/she may want to choose.
The equity fund's total return, like the stock market in general, may fluctuate widely in the short to medium term. Hence, over time, an individual's investment in the fund may either perform better or decline in value compared to other investments such as bonds and money market placements. The performance of his/her investment will generally follow the performance of the economy as well as market trends. It is commonly acknowledged that over long periods of time, the stock market has always rewarded patient, long-term investors.
- Can I invest in more than one fund?
Yes, you may invest in more than one fund provided that your allocation for each chosen fund is at least 10% of your total investment and the total allocation is 100%.
- What are unit and unit price?
The policyowner's share in the separate fund represents a unit. A policyowner may have more than one unit.
The unit price is the value of the underlying assets of the separate fund divided by the number of units issued.
- Where can I find the current unit price/s of my investment linked policy?
This can be viewed in our website www.insularlife.com.ph and is published every Friday in the business section of the Philippine Star.
- What is Fund or Account Value?
This is the value of the investment-linked insurance policy based on the performance of the separate fund at the time of valuation.
- Will my beneficiaries get anything if something happens to me?
Yes, your beneficiaries will get whichever is higher of the fund value or the minimum guaranteed death benefit.
- Is it possible for me to withdraw part of my investment?
You can withdraw from any of your funds as long as your policy has a withdrawal value. Minimum withdrawal is Php10,000 and minimum balance after withdrawal is Php20,000.
* If your balance after partial withdrawal is less than the minimum required, you must fully withdraw your fund and your policy will be terminated. At present, no withdrawal fee is charged for full withdrawals. However, we may impose a withdrawal fee for full withdrawals at a later date.
- Is it possible to cancel my investment linked policy should I find it unsuitable to my needs?
Yes, it is possible to cancel your investment linked policy within the 15-day cooling off period. During the cooling off period, the policyowner can review the policy and should he decide that the policy is not suitable to his needs, the policy can be returned with the policy data page within 15 days from the date it was received and the company will refund the market value of the units including the initial and insurance charges.
- If the investment fund that I choose did not perform well, can I transfer or switch to another fund?
Subject to company's approval, yes, you can transfer or switch to another fund as long as the policy is still in force. The minimum amount that you can switch out of a fund is Php10,000.00.
You will be granted one (1) free switch per policy year. A switching fee of 1% of the amount to be switched will be charged for additional switches. The switching fee is deducted from both funds according to the proportion of the fund's value to the total fund value at time of fund switching.
- What happens if I plan to discontinue my policy?
You can apply for a full withdrawal of the funds once the policy has a withdrawal value if you plan to discontinue your policy. At present, no withdrawal fee is charged for full withdrawals. However, we may impose a withdrawal fee for full withdrawals at a later date.
- What are Top-ups?
Top-ups are additional premiums on top of your single premium. Subject to company's approval, you can place this additional single premium payment/s anytime while your policy is in force.
These top-ups will be invested in separate funds of your choice. Minimum top-up is Php20,000.
- What is buying and selling of units and when can I buy and sell units?
Buying of units is also known as top-up or "fund switch to" while selling is withdrawal or "fund switch from".
Buying and selling is dependent on the time IL receives the policyowner's application.
If the application for single premium, top-up, etc. is received from Tuesday to Saturday, the unit price will be the price published on the following Friday.
If the application for single premium, top-up, etc. is received on Monday, the unit price will be the price published on the coming Friday.
- Are there charges to be deducted from my premium?
Yes, there will be allocation of charges and expenses. These are as follows:
- Insurance charges which is % of single and top-up premiums based on age of insured at time of single or top-up premium;
- Acquisition and administration charges of 6%;
- Annual investment management charges;
- Fixed income fund of 1.5% of the fund value (at present);
- Balanced fund 1.75% of the fund value, at present;
- An annual investment management rate is subject to a maximum of 2% for each fund; and,
- An annual fund accounting charges of 0.50% - 0.75% of the fund value for each fund.
- Investment linked product is a non-traditional life insurance product, how does this differ from a traditional life insurance?
In traditional life insurance that consists of life and endowment products, Insular life decides on where to place the premium. But since our investment linked product is a non-traditional life insurance product, you, as the policyowner have the option in choosing where to invest your premiums. Investment risks are borne by the policyowner under an investment linked product. Under traditional life insurance, it is the company which bears the risk by paying the sum insured as stated in the policy regardless of the investment performance.
- How much earnings will I make from my investment linked policy? Are these guaranteed?
For illustration purposes, earnings are shown in 5%, 10%, and 15% per annum. The actual earnings will depend on the performance of the fund and the length of time it is being invested. And because the earnings shown are for illustration purposes only, these are NOT guaranteed.
- How much is the minimum single premium?
Minimum single premium is Php50,000.
- Why should I invest in Wealth Builder?
- Wealth Builder has a lower mortality charge compared to other investment-linked products. In effect, the remaining premium to be invested in the selected fund/s is higher.
- Insular Life's investment portfolio to which funds will be invested is well-diversified and includes corporate loans to prime leaders in the industry. These generally generate higher yields.
- Moreover, the interest income of corporate loans is subject to final tax and is only charged a 2% withholding tax. This increases the net proceeds of the investment.
- "Small" investors will benefit from the interest rates the "pooled funds" will generate. From a fund base of approximately P200 million, an investor who puts in P50,000 will be able to share in the higher yield the pooled fund will generate.
- The increase in Wealth Builder's Net Asset Value (NAV) will not be subject to tax. For instance if the NAV this week is P1.00 and increases to P1.10 the following week, the P0.10 difference will not be subject to tax.
On the other hand, increases in the fund level of other financial instruments, such as savings, time deposits or trust accounts, are subject to tax.
- Being a life insurance product, the living benefit (fund value) or the death benefit of Wealth Secure cannot be garnished. In effect, the investment placed by the policyowner and the earnings and proceeds from his investment are protected from creditors.
On the other hand, investments in mutual funds, common trust funds, and time deposit/savings accounts can be garnished.
- Wealth Builder enjoys tax leverage. It is not subject to any of the following taxes: value added tax (VAT), personal income tax, or estate tax.
- Wealth Builder's life insurance component guarantees a minimum death benefit equal to 125% of single premium plus top-ups less withdrawals. If the insured dies even if the fund value is lower than the amount invested, his/her beneficiaries are guaranteed to receive the death benefit.
Debunking the Investment Myth
When financial markets are down, one should shy away from putting in money. True? FALSE. Truth is, dips in the market present opportunities to invest, contrary to popular belief and common fears that one should avoid investing during such times.
» So what are the opportunities in a downtrend?
- Prime rated corporate stocks are at a discount!
The stock prices of several blue chip companies are currently sold below their actual book value – effectively being sold at a discount! At the current rates, these stocks are being sold below what they are really worth. When the market recovers, you'd be able to generate yields as the companies' stock prices reflect their real worth.
- The Philippines' economic resilience is a springboard for faster recovery.
Our country is not as badly hit by the recent global crisis as our other Asian counterparts; thus, we are more likely to experience faster recovery.
- A higher earning potential than what savings or time deposits offer.
If funds for emergency and short-term needs are sufficient and safely kept in the bank, consider putting your excess cash in vehicles that give higher returns to maximize your funds' growth. In recent months, we have observed an upward trend in the financial market, an indication that recovery may come sooner than later.
» With these opportunities, what must you do to maximize your yields in a bearish market?
You can put your money directly in the stock market through a broker; or you may want to consider having investment managers handle your funds. Alternatively, you may want to invest in an investment linked insurance product. Insular Life's Wealth Series products, for instance, provide you the opportunity of earning more while providing your family the needed protection against risk of economic loss.
The Wealth Series is composed of three different products:
Wealth Builder is a single pay, peso-denominated investment product that allots a substantial amount of the premium in your choice of fund, depending on your target rate of return or risk appetite. A small portion of your single premium is then allocated to cover the insurance charge. Wealth Builder provides insurance coverage equal to 125% of the premium or the value of your fund, whichever is higher.
Dollar Wealth Builder is a single pay, US dollar-denominated investment product. It invests in dollar-denominated fixed income instruments issued mainly by the Philippine government and prime corporations.
Wealth Secure another peso denominated investment-linked insurance product, allows you to get higher protection or insurance coverage (at least five times the annual premium) than the Wealth Builder. Starting at a lower premium, it allows one to save or invest regularly for a long-term financial goal.
» What fund options are available?
There are three funds available for you:
- Equity Fund – ideal for those with high risk appetite and expect high returns. This fund provides an individual with long-term total return and capital appreciation by investing primarily in dividend-paying shares of local companies with large capitalization and growth potential and which are listed in the Philippine Stock Exchange. The performance of your investment will generally follow the performance of the economy as well as market trends. It is commonly acknowledged that over long periods of time, the stock market has always rewarded patient, long-term investors.
- Fixed Income Fund - ideal for those with low appetite for risk and may be content with lower returns. This fund is mainly invested in financial instruments issued by the government or corporations. Capital growth will mainly come from stable and predictable interest payments on bond issuances of the government which are virtually risk-free, as well as term loans of prime-rated corporations. This type of investment fund appeals mostly to conservative investors.
- Balanced Fund – ideal for those with a moderate risk appetite and who will be content with moderate returns. It lets you enjoy the best of both worlds by simultaneously providing you with long-term growth and a steady fund performance. This fund will tend to deliver moderate yields and capital growth over the long term.
As for the Dollar Wealth Builder plan, this is mainly invested in the Dollar Fixed Income Fund. This fund is composed of investments placed in a diversified portfolio of US dollar-denominated fixed income instruments issued mainly by the Philippine government and prime corporations. Investment performance would generally follow global market trends as the fund is intended to achieve income growth over the long-term.
» What are the advantages of investing in Variable Unit Linked products over doing it by your own?
The advantages of Insular Life's Wealth Series can be summed up as follows:
- Professional Fund Management
The funds are managed by a team of highly competent and experienced Investment Managers who have extensive knowledge and experience in both local and global financial markets.
Wealth Series allows you to take a position in a diversified portfolio of blue chip stocks and bonds which are continuously managed by our team of investment managers. This route is much more expedient than having to choose the stocks or bonds on your own.
- Diversified Investment Portfolio
Funds are invested in a diversified portfolio of stocks, bonds, prime corporate notes and short-term money market instruments.
- Pooled Investment
Your investment is pooled with the funds of other clients and with the company's institutional funds, the resulting size of which, allows you to enjoy the advantages of a large institutional investor such as lower transaction costs, access to desirable investment opportunities, preferred rates from other financial institutions and the services of a full time fund manager.
Interested to invest but would want to know how to get started? Call any of the Insular Life Financial Advisers or contact 582-1818 local 5122.
You may also e-mail firstname.lastname@example.org. Maximize your earnings to fulfill your financial goals. Don't waste time. Invest in any of Insular Life's Wealth Series products, NOW!
How much life insurance do you actually need? What are the things that you have to consider to find out how much you need? Check out our Financial Needs Analysis calculator.
For more details on our investment-linked insurance products, please click here.
For our savings and protection products, click here.
You may also check out our FAQ page for answers to frequently-asked questions on life insurance.
For proposals and product details, please call/visit your Insular Life agent, your nearest Insular Life office, or Brand Marketing Department at Tel. No. 582-1818 or by e-mail email@example.com.
Understand your Lifestage and experience financial freedom!
Insular Life offers help through its Lifestage insurance programs which provide a quick guide on what to expect in each lifestage and the necessities at this phase. Plan wisely! Look Ahead, Be Assured
You have the "in" stuff in your hands! You talk big and dream big. Generally without financial obligations, you keep your to yourself or spend it on the latest items in fashion. This leaves the impression that you live for the "NOW" more than for the future.
- Access to funds in the mid-term something that will compel you to save regularly today; must not be easily withdrawn once you see the letters S, A, L, E.
- Active lifestyle protection you'll need cash benefits should the unforeseen happen as a result of your active lifestyle
Available in 5 or 10 pay programs, this plan gives insurance protection and cash allowances starting on the 6th year and every two years thereafter, for life!
An accident insurance product that also provides benefits for hospitalization and surgery due to accident.
|Review your expenditures and reduce or take out unnecessary spending. The main idea is to enjoy life even after you have retired, so make sure you have the healthy body and financial resources to do so. Remember that savings is not equal to income less expenses. Rather, you should pay yourself first by taking out your savings from your income and just spending what is left.
Congratulations! This is an exciting stage of your life. Expenses may increase to maintain your home, but the additional income from your spouse can augment your resources. You now plan to save as you prepare to build a family.
| - Income Protection. With your standard of living dependent on dual income, you and your partner will need something to replace a portion of the income that may be lost as a result of one's demise.
Also in 5- or 10-pay programs, this limited pay plan provides lifetime insurance coverage
|Among many financial vehicles, they say that life protection should be first in the list. Life protection provides temporary financial relief should income be lost due to the breadwinner's demise. Review your insurance coverage periodically, as it often needs adjustment due to lifestyle change and inflation.
The birth of a child is one of life's greatest joys! You plan on raising your child well and giving him the best that life can offer. Your skills in money management will be truly put to the test.
School expenses in the country's best schools can be prohibitive. It is wise to save for it as early as you can!
- Health Care
You need to build up your savings for the hospitalization and treatment of a family member's illness
A 5- or 10-pay college education insurance program that gives increasing education benefits starting on the school year after the 16th birthday of the child.
- It is a 5-pay savings plan that gives hospitalization income, dread disease coverage and living cash benefits from the 8th to 15th year.
|Filipinos still believe that a good quality of education is the best gift parents could give to their children. But with tuition fee increasing at an average of 12% per annum, it is best to look for a dependable company which will ease the burden of shouldering the cost of education. Health protection also becomes critical at this stage. With young dependents, consider setting aside a portion for health care savings so that needs of other family members are not sacrificed.
Life begins at 40! For many people, this lifestage is a key turning point. Now that your children are out of the house and on their own, they are off your "payroll," and it's time to refocus on yourself and your spouse.
|- Completion of Retirement Funding
With a few income earning years, it is best to complete your retirement fund
Because you want to fully enjoy life, you need an investment tool that will supplement your retirement funds.
- A 5-year to pay, 15- year to mature product which provides living cash benefits from the 8th to the 15th year which you can use for future expenses.
- An investment linked product where a single premium can be invested in various fund types depending on one's growth objective and time horizon.
|This lifestage is the time to re-examine your budget and concentrate on your savings for retirement. Know your potential benefits from your employer and SSS or GSIS. Also consider ending your remaining debts and loans. Inject inflation and the onset of medical expenses when you project your retirement expenses.
Retirement can be a major life change especially for those who have worked all their lives. Relax. Retirement should not be feared but enjoyed. It affords you time to travel, join altruistic ventures and be more involved in community work.
|- Wealth Management
You don't want a big part of your estate gone due to taxes. Consider saving for it now to avoid the erosion of your assets' value. Make sure your heirs are provided with funds needed for transfer, real estate and all other taxes.
Available in 5- or 10- pay programs, this limited pay plan provides lifetime insurance coverage whose benefits can be used by your beneficiaries to settle taxes related to estate.
|Transfer of real estate properties incurs significant tax expense which depends on the current and fair market value of your asset. By getting a life insurance plan, you pass on your estate to your heirs as intact as possible because the benefits of the plan will take care of tax funding and estate creation.
This is just a glimpse of your needs and how you can manage your finances regardless of what lifestage you are in. For any help, just get in touch with our Insular Life's financial advisers who have the expertise in assessing your needs and offering product solutions. Contact us at 582-1818 or e-mail us at firstname.lastname@example.org. Visit our website at www.insularlife.com.ph. We can help.