The Importance of Variable Life Insurance

Posted On Monday, 14 Jan 2013 By Tyrone Solee. Under Investments, Personal

Finance Tags: financial plan, insurance, invest, mutual funds, retirement, savings
When you hear the words life insurance? What does it mean to you? Does it mean an
additional expense on your budget? Or does it mean a product for your financial
security?

In most cases, people would either live too long or die too young. Both cases need to be
addressed in terms of financial security.
Life Insurance
When you die too young, your dependents will suffer especially if youre the
breadwinner of the family. They will lose the major income earner which they
depended for many years. Aside from the hard time coping for your loss, they will also
have a hard time coping for the expenses of the family. So how do you make sure that
the financial needs of your loved ones will be taken cared of when you suddenly
passed away? The answer is life insurance.
Consequently, when you live too long, you need some retirement funds to address your
needs when old age comes. Nowadays, Filipino men have a life expectancy of 68.72
years while Filipina women are at 74.74 years. When you live that long, you would
need some funds to address your needs most especially your health. You dont want to

be a burden to your sons and daughters when that time comes. So how would you
address this need? The answer is investments.

Variable Universal Life Insurance or VUL

Life insurance has evolved to address the needs of dying too young and living too long.
And this is where Variable Universal Life Insurance or VUL comes into play.
This is a type of permanent life insurance that pays the death benefit to your
beneficiary when you die too soon, but also has an investment component just like a
mutual fund that generates income and builds on cash value which you will receive if
you live too long.
A win-win situation right? To understand more about VUL insurance products, Pesos
and Sense made an educational video below:

The Riders that come with VUL Insurance

VUL insurance products have been designed to come up with riders to protect more of
lifes uncertainties. Upon studying some of them in detail, I can say that the most
important are the accidental death benefit, the critical illness benefit, and the hospital
income benefit.
Accidental death benefit doubles the face amount that the beneficiary gets when the
insured dies due to accident.
Critical Illness Benefit gives additional benefit the moment when insured contracts
any of the diseases listed as critical illness. This will be a big help on medicines and
hospitalization expenses.
Hospital Income Benefit gives additional amount per day when insured gets confined
in a hospital due to sickness or injury.
The Best Time To Invest in Insurance
As with most investments, TIME is the best ally and the most important factor in
investing in life insurance. The younger and healthier you are, the lower your
premiums and the more time for the investment component of your insurance to grow
and build cash.

Dying young or living to old age, we need money in both cases. Life insurance is the
only product that we need to have when we dont need it because we cant avail it when
we already need it. Its like an umbrella. You dont need it not until it starts to rain but
if you dont have it with you when its already raining, its too late to go home and get it.

UITFs and Mutual Funds A Closer Look

Posted On Saturday, 10 Nov 2012 By Tyrone Solee. Under Investments Tags: invest,
money, mutual funds, UITFs
UITFs and Mutual Funds have been one of the best ways to invest your money
nowadays. This is because these funds give you access to investments managed by
financial experts with just a minimum capital requirements.
Although these two funds have both similarities and differences, investing in them
gives an investor a potential high yield given enough time.
Lets take a closer look on both UITFs and mutual funds offered by different banks
and investment companies. Who has the best performing UITF and mutual fund?

Performance
When viewing the performance below, take note that past performance is not an
indicative of future performance. In addition, mutual funds have a sales load fee of 2%
which is deductible upfront upon investment to the fund. Thats an additional cost and
a decreased return on the part of the investor.
Below is the top 10 best performing peso-denominated mutual funds as of November
9, 2012 YTD. All of them are equity funds except GSIS Mutual Fund and Philam Fund
which are both balanced funds. BPI Philippine Stock Index Fund has the best return
with 26.72% and to top it off, it has NO sales load as compared to other mutual funds!
Below are the top 10 best performing UITF product as of November 9, 2012 YTD. All of
them are equity funds except BDO Peso Balanced Fund, Metro Balanced Fund, and
China Bank Balanced Fund. The best performing fund is Union Bank Large Cap
Philippine Equity UITF with a nice yield of 39.9%!

However, dont get too much excited on Union Bank Large Cap Philippine Equity Fund.
Based on research, they have sales load similar to mutual funds. In addition, their
NAVPU computation is very tricky. When you checked their website, they have bid,
offer and mid/last price. Based on my research, when you invest in the fund, the
offer NAVPU will be used. When you redeem your units, the bid NAVPU will be used.
They have high OFFER NAVPU and lower BID NAVPU. Higher Offer NAVPU means
less units to be bought while lower BID NAVPU also means lesser gains for the
investor. Whats interesting is, the difference between their OFFER and BID NAVPUs is
huge and Union Bank is earning a lot from the spread cost!

Index Funds

In terms of performance, hats off to BPI for their Index Funds. BPI has two Index
Funds available. These are the Philippine Dollar Bond Index Fund, a dollardenominated bond fund UITF product and Philippine Stock Index Fund, a pesodenominated equity mutual fund.
Both of these funds have been performing really really well. Philippine Dollar Bond
Index Fund tracks the JP Morgan Asia Credit Index as its benchmark while Philippine

Stock Index Fund tracks the Philippine Stock Exchange Composite Index (PSEi) as its
benchmark. I must say that these are the pride products of BPI.
Last September, I made an article that focuses on Philippine Dollar Bond Index Fund.
In my own personal opinion, this is one of the best ways to invest your US dollars if
youre a dollar earner or have dollar savings

UITF Products

BPI has the widest variety of UITF products. With the addition of Odyssey Funds
which they recently acquired from ING, they now both offer BPI Investment Funds and
Odyssey Funds that give the widest array of choice to their investors.
I made a special mention on BPI UITF products because of two things. They are the
only bank which does not have holding periods in all of their UITF products and they
are the only bank which allows additional top-up investments online through BPI
Express Online.
No Holding Period. BPI recently waived all the holding periods last August of this year
2012. This means you can pull out your money from the fund anytime you want. This
gives a chance for investors like you to take advantage of the ultimate strategy of
buying low and selling high. Investors may lock in profits by selling units when NAVPU
is high and buying more units when the NAVPU is low.
Online UITF Investing. BPI Express Online is one of the best platforms for internet
banking. Its a must to have it when youre a BPI depositor. They are the only bank
where you can invest through their UITF products without the hassle of going to the
bank EXCEPT for account opening.
The only time you have to go to the branch is when you open an account. This is
because you have to nominate your settlement account. Once you have it nominated
and enrolled on BPI Express Online, then you can make additional investments online.
No need to visit branch. This is very beneficial to OFWs who dont have the luxury of
time to visit their branches.
When you open an account, just remember to tell the one assisting you that you want
to enroll your UITF investments to BPI Express Online. Once you are enrolled, you
have the capability to view the value of your investments including its net return.
Whats best is that even if you fully redeemed all the units on your UITF investment,
your account will remain and will not be closed.
Odyssey Philippine High Conviction Equity Fund. One of the UITF products offered by
BPI is their highly hyped Odyssey Philippine High Conviction Equity Fund. This is so

because this is one of the best performing fund among UITF and mutual funds
BEFORE.
Looking more closely on where the fund was invested, it suffices to say that the recent
downfall of the return of the fund can be attributed mainly to the falling stock price of
Philex Mining. Its all over the news. Philex Mining has been involved in environmental
sanctions in their Padcal Mine. They were even asked by the government to pay 1
billion pesos worth of damages. This caused the stock price to fall tremendously.
I was invited recently by my branch manager to attend a Coffee Talk session together
with the rest of their Preferred Banking Clients. It was an investment insights seminar
to brief BPI investors about the different investment funds that they offer. One of the
attendees asked the direction of the Odyssey Philippine High Conviction Equity Fund
as the fund is experiencing a downturn on its return due to their holdings on mining
stocks particularly that of Philex Mining. The seminar facilitator told us that the next
big thing are entertainment stocks. The fund managers are keen on unloading mining
stocks to re-invest on entertainment stocks. In the news recently is casino developer
Belle Corp. signing a joint deal Macaus Melco to form a casino complex at Paranaque
City.
Every investment carries a risk. Before investing in a mutual fund and UITFs,
remember to assess your risk profile whether youre a risk averse, moderate risk, or
aggressive investor. After assessment, then you can choose the fund which suits you
best. Happy Investing!.

The Ultimate Guide On How To Be A Financial Advisor

in the Philippines
FEBRUARY 16, 2016 BY NICK RAQUEL 2 COMMENTS
Lets face it, the Financial Industry is a very confusing maze to go to. There are lots of
jargons that are really overwhelming - the ticker tapes, bears and bulls, life insurance,
stock market, corporate bonds, treasury bills, and really, a whole bunch of them.
The bigger challenge is that we really need to learn about these financial products in
order for us to effectively use them in planning and preparing our own personal
finances - for our present, and for our future.

One of the few professionals who are actively trying to bridge the gap - from not
knowing about financial instruments, to making use of them in enriching an
individuals financial life, are Financial Advisors.

WHAT IS A FINANCIAL ADVISOR?

The word Financial Advisor is a very broad term - encompassing many professions
like bankers, stockbrokers, insurance advisors, and many others that provides
advisory services to promote the financial products that they are affiliated to.
In this guide, when I refer to Financial Advisors, Im talking about life insurance
agents - and how fascinating, exciting, and fulfilling this profession can be.

ROLES OF FINANCIAL ADVISORS IN THE SOCIETY

The role of life insurance agents, insurance advisors, financial consultants, or
financial advisors, whatever the professionals are called, is to provide solution to a
certain need - whether a person/client is conscious about that need or not.
Its true that many people dont think that they need life insurance, or dont think
theres a need to invest. In those situation, the role of a Financial Advisor becomes an
educator, a teacher - giving light to an aspect in life that is most of the time neglected
until its too late to act.
Truth is, Financial Advisors change lives, one client at a time - greatly contributing to
a grand advocacy of financial literacy for the Filipino people.
No wonder many doctors, accountants, business people, and other professionals
dropped what they do to take on the role of a Financial Advisor full time because of
the rewards and fulfillment it bring to ones life (to themselves and to other people).

WHAT DO FINANCIAL ADVISORS REALLY DO?

Full time Financial Advisors are self-employed professionals. This means that they are
not really tied up to an 8 to 5 work week. This also means that financial advisors tend
to have different activities individually, but can still be summarised as follows:
1. Reaching and Connecting to people needing the service
2. Meet future clients and conduct Financial Needs Analysis to further diagnose the
need and be able to provide the most appropriate solution
3. Assist the implementation of the Financial Plan of the client

4. Monitor the progress of the implementation of the Financial Plan and make
adjustments, if necessary.

REASONS WHY SOME PEOPLE ARE ATTRACTED TO BE A

FINANCIAL ADVISOR
Here are some of the reasons why many professionals and business people decide to
be a full-time Financial Advisor.
1. The opportunity to meet new people everyday
2. The opportunity to learn different things from other people
3. The freedom to take control of ones time and be flexible in spending it in enriching
the business
4. Endless opportunities in increasing income
It is true that its possible to be a part-time financial advisor. But it is really more
enjoyable and worthwhile to do it, full time.

REQUIREMENTS
PHILIPPINES

TO

BE

FINANCIAL

ADVISOR

IN

THE

Financial Advisors are regulated by the Insurance Commission (IC). To operate as a

Financial Advisor here in the Philippines, youll need to get a license issued by the IC.
There are two kinds of life insurance license that are issued by the insurance
commission.
One is the license to sell Traditional Life Insurance. These are the more classic type
of life insurance that offers either just life insurance (term insurance) or life insurance
with savings (whole life and endowment).
The second license obtained by Life Insurance Advisors is the license to sell Variable
Unit Link Insurance, popularly known as VUL. This is the newest type of life insurance
that have a built in investment component on it.
Now the question is, what are the requirements to obtain those license and be a
Financial Advisor?
Truth is, youll just need to be sponsored by a life insurance company and be at least a
College Graduate to take the licensing exam.

With that, lets talk about the whole process on how you can be a Financial Advisor
here in the Philippines.

PROCESS TO BE A FINANCIAL ADVISOR

There are four parties involved in this process. They are:
- You
- The Life Insurance Company that you are applying in
- Your recruiting manager
- The Insurance Commission
In general, the process would flow in this order.
1. You submit your application to a recruiting manager. If you dont know someone,
you may submit your application in this link and well connect you with them.
2. The recruiting manager will review your qualifications and subject you to some
personality exams and interviews. Nothing much to note here but to just be yourself.
Each recruiting manager has his/her own standards of people to include in their
team. If, by any chance, you were rejected by a specific recruiting manager, you may
always try to explore with other recruiting managers. Most of the time, rejections are
due to personality mismatch between applicant and the recruiting manager.
3. Once you have completed the exams and interviews, you will then undergo a
training program to prepare you for the licensing exam with the Insurance
Commission.
4. Then, youll take the actual exam.
In most cases, the reviewers provided by the life insurance company usually
corresponds nearly to the content of the exam provided by the Insurance Commission.
That does not guarantee anything though. Its best to study and prepare yourself well
for the exam.
5. After passing the exam, the next part of the process is the contract signing.
Generally, this is the stage where compensation package and other monetary benefits
are discussed.
Each life insurance companys benefits will greatly differ though.

6. After contract signing, and once you have met your branchs minimum
requirements, youll then be coded. Coding is a technical term used to mean that an
advisor has been officially entered in the life insurance companys system.
Once you are coded, you become officially part of the Financial Advisory profession.
However, you should always prove that you deserve that title. You can do that by
accumulating as much knowledge as possible and by becoming a credible professional
that provides advice that makes sense.