Life insurance policies that include a mutual fund savings component can be a good option for some people. These policies are often called “variable life insurance” or “variable universal life insurance” policies.
It is good if the economy is stable and bad insurance investment if the economy is poor like when the country experienced Covid pandemic plus super typhoon 2021. It will bring down the value of your investment through the stock market.
HUGE POTENTIAL EARNING (Equity Fund – jolibee etc.)
The mutual fund component of these policies allows you to invest a portion of your premiums in a variety of mutual funds, which can potentially earn higher returns than a traditional life insurance policy. This can be particularly appealing for people who want the protection of life insurance coverage but also want to grow their savings. Your saving can earn up to 8% interest and get huge conversion when you reach 65 years old and in bad situation lesser even you are 80 years old.
SAMPLE COMPUTATION
A Php 1000 monthly contribution or 12,000 annual fee normally have Php350k face value. In 10yrs you will pay a total of Php120,000 with accidental and death insurance. This 120k will be put as investment in the mutual fund either balance or aggressive to earn interest annually until you reach 65 years old. SO for 35 years you can not touch your 120k investment money to expect a php 1.6M at 65 years under estimate of straight 6% per year.
INVESTMENT WITH NO GUARANTEE
However, it’s important to keep in mind that there are risks involved with investing in mutual funds, and there are no guarantees of investment returns. Additionally, these types of policies can be more expensive than traditional life insurance policies, and the fees associated with them can eat into your investment returns. When the value of the stock goes down because of WAR, CALAMITY, PANDEMIC, POLITICS and more, your investment can end up nothing.
MY OWN EXPERIENCE
My life insurance investment started on 2011 with Sun Life. It has accident and death benefits riders since I travel by motorcycle daily as BPO employee of Live2Sell group of companies in Mandaue City. I pay Php 31,000 annually for 10 yrs so I complete it as 2021.
Php 31,000 annually since 2011
Php 330,000 after 10 yrs at 2021
Php 240,000 actual money after I inquire to my agent This May 5 2023.
It did not earn and even lesser than actual saving. The agent from Sunlife located in Ayala Center said it is because of the Pandemic. Now
Before deciding whether a life insurance policy with a mutual fund savings component is right for you, it’s important to speak with a financial advisor or insurance professional who can help you evaluate your options and determine whether this type of policy aligns with your overall financial goals and risk tolerance.
Better investment
The best investment as small business owner is to put your money into small business with less competition and located on the right market. It could be near school, near church or inside the mall. However, small business required full attention and time consuming so if you looking to earn 6% in a long term better invest you excess money through digital bank.
Tonics offer 6% on time deposit per annum.
