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. 15.1 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. 15.2 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? 20.1 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. 20.2 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. 20.2.1 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. 20.3 "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. 20.4 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. 20.5 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. 20.6 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. 20.7 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.

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