Investment Linked Insurance Products

This is the continuation of my previous blog BANKS: The Only Option For Savings?

Investment linked products are Life Insurance tied up with an investment. This means that your investments are secured with life insurance coverage. And this has become the preferred choice of Filipinos over traditional life insurance nowadays because of its flexibility and value for money.

Investment linked products of life insurance companies caters yuppies, matured and even old people. There are also options for your risk appetite – low risk, medium risk, and high risk. Should your risk appetite change from time to time, it wouldn’t be a problem as you can switch funds or change death benefits. Your financial advisor should take care of the amount of the account and through assessment of your financial situation he should be able to recommend a plan perfect for you.

What is its feature?

• Flexible payment mode. Option of paying annually, semi-annually, and quarterly.
• Flexible payment years. You decide. Whether to pay regularly, only a few years, skip payments (premium holidays), or pay once.
• Withdrawal. Partial or whole. Just like the bank, you can withdraw.
• Deposit. If you want to deposit, you can do so. In this case it is called a top up.
• Very low cost of Life Insurance Coverage. It just takes 3 years to pay the coverage. On the 1^st year 100% of the premium goes to coverage, the 2^nd and 3^rd year only 50% goes to coverage and the other half goes to the investment. The succeeding years of payment (if any) will go to investment.
• Premium Holiday. You may opt not to pay as long as the insurance coverage will be covered by the fund.
• Death Benefit Option. You can switch anytime from level death benefit to increasing death benefit depending or back, depending on how important coverage would be in a certain situation of your life.
• Option of Funds. Balanced Fund which consists of equities around 30%, money market instruments around 10% and bonds around 60%. Equity Fund has around 10% money market instruments and the rest are equities. Bond Fund has around 5% money market instruments and the rest are bonds.
• Switching Funds. You are entitled to switch funds if you wish to do so. It’s just as simple as moving from Equity Fund to Balanced Fund.

So this is an investment? Yes an investment for your future. If you are trying to save up for the future this would probably be your best option.

This type of investment is a steal because while you are saving for the future, you are also covered. That surely beats savings in banks. When something happens to you, your family will get an amount plus the investments. In banks when something happens to you, it would be very hard to claim the account.

Think about it, from day one of your premium, you 20, 30, 40 thousand is already worth 400 thousand. Saving with this investment vehicle is the smartest thing to do right now. No matter how old you are, saving is always better to do NOW than later. And never forget that there is no such thing as instant growth of money, so before you get one, understand that this is a long term savings plan. This is an alternative to savings banks and you would be sure that your savings are protected with coverage. - DE

2nd photo: Taken from iStockPhoto, thus the watermark.