THE Sun Life Investment Management and Trust Corp. (Sun Life IMT) announced it has re-introduced its Variable Unit-Linked (VUL) insurance plan after policyholders expressed their investments did not grow as they expected.
‘It’s not a one-size-fits-all product, and it’s certainly not a shortcut to wealth. It’s a financial tool designed to protect first and grow second,’ Head of Insurance Investments Ivan P. Corcuera said.
According to Corcuera, the VUL is a dual-purpose product that combines protection and fund accumulation, focusing on life insurance first before fund generation unlike dedicated investment vehicles like mutual funds or stock trading.
‘Unlike a pure investment where beneficiaries only receive the value of accumulated savings, a VUL ensures that they receive a predetermined, substantial amount,’ he explained.
The VUL’s primary function, which is the life insurance coverage, provides a death benefit payout to beneficiaries upon the insured’s death.
Meanwhile, another portion of the premium, Corcuera said, is poured into managed funds with the aim to grow over time. The fund value, which is the accumulated value of the investment, can be accessed during the policyholder’s lifetime for their own financial goals.
He cautioned, however, that the fund value is tied to the performance of the chosen investment fund, which could either increase or decrease depending on market movement.
Corcuera was quoted in a statement as saying that the fund value also helps keep the insurance component active by paying for its cost and any applicable charges.
‘A portion of these units is deducted to pay for insurance and periodic charges, ensuring your policy remains active and your life insurance coverage intact. The remaining units continue to accumulate and determine your policy’s fund value, which can potentially grow over time,’ Corcuera said.
‘VUL is your shield and your tool for financial growth, but like any tool, it works best when used and understood correctly with clarity, commitment, and guidance,’ he added.