For first time investors, putting money in the stock market can be an intimidating experience. We often hear things like “How?” or “Where do I start?” Fortunately for us, single-pay variable universal life (SP VUL) is an option available for beginners as well as experienced investors. For almost 2 decades now, SP VUL has been the investment vehicle of choice for people who want flexibility with their money as well as the potential to earn higher returns in the long term. That’s why here at Insurance Manila PH, we compiled 5 things that you need to know before you decide to invest in SP VUL.
1. Pooled Funds
Pooling funds gives you the chance to earn on local and offshore investments with ample capital. It is done by gathering funds from several investors, and this pool of funds is invested as one on several higher-return investments. The initial investment for a number of insurance companies in the Philippines starts at Php 100,000.
2. Fund Managers
Having the luxury of fund managers to implement strategies on your investment not only maximizes your earnings in the long term, their work also includes minimizing the losses when a bad economic situation happens, like the one we are experiencing now.
3. Diversified Portfolio
Ever heard of the saying, “Don’t put all your eggs in one basket”? The idea behind this is to not concentrate in just one area, in the risk of losing everything. Investing in stocks has associated market risks that could significantly decrease your investment value, especially in times of crises (hello COVID-19!). While investing solely in too-conservative funds like bonds has the risk of weakening your purchasing power in the long run. The key is to find the right balance in your portfolio.
Having a financial plan is not a one-time thing. It requires frequent monitoring and aligning with your current situation. Thus, changing your fund allocation might be beneficial. Tip 💡: Look for a company that offers up to 8 FREE fund switches per year! Feeling brave to take on a little more risk? Increase your fund allocation in stocks. Market too volatile for you? You can move majority of your funds to a more conservative one, like bonds. Reach out to your financial advisor on how you can take advantage of this.
4. Insurance Guarantee
Investing involves risk; and the general rule is, the higher the risk, the higher the POTENTIAL gain. When investing, there is usually no guarantee on the returns. You might even lose some of your initial investment. One of the special features of SP VUL is that in case of sudden demise of the insured, their beneficiaries will receive 125% of what they put in, GUARANTEED. And here’s the good news: The cost of insurance can be as low as a few hundred pesos per year for starter plans. Imagine having that peace of mind that you’ll be able to leave 125% (or more!) to your loved ones, just by investing your extra money in the bank. No other investment vehicle can give you that.
5. Easy Access
Most people invest in order to prepare for expected life events like retirement and education. Because you worked hard to earn your money, you want access to your funds to be as seamless as possible. Whereas just a couple of years ago, making withdrawals from your account will require you to meet your financial advisor and submit signed paperwork, right now some companies have already upgraded this process to adapt to the digital platform. You can now get fund updates and do transfers from your policy to your bank account at the touch of a screen.
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