[Finterest] Should you invest in Singlife’s new Income Multiplier VUL insurance?

6 days ago 7

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[Finterest] Should you invest in Singlife’s new Income Multiplier VUL insurance?

Income Multiplier aims to provide a targeted monthly payout of 5% yearly — though this is not a guaranteed figure

MANILA, Philippines – Singlife is putting its own twist on variable unit-linked (VUL) insurance with Income Multiplier, which offers monthly cash payouts while keeping your money invested.

VULs work differently from traditional life insurance. Instead of a fixed payout when a policyholder passes away, the payout depends on the performance of an investment fund linked to the policy.

This means that policyholders are mixing their life insurance with an investment component that has the potential to grow. However, this also means taking on market risk, as returns aren’t guaranteed. You should be aware too that you might get a better deal separating your investment products — a cheaper term life policy and a separate investment into a mutual fund or unit investment trust fund — rather than combining it into a VUL.

That aside, if you’re still set on a VUL and like the idea of receiving monthly payouts, Singlife’s Income Multiplier may be worth considering.

How it works

Let’s start with the most distinguishing feature of the Income Multiplier: the monthly cash payouts. This is something most VULs don’t offer. Traditional VULS require policyholders to partially withdraw or surrender their policy to realize their investment gains. In contrast, Income Multiplier aims to provide a targeted monthly payout of 5% yearly — though this is not a guaranteed figure.

This instrument invests your money in the ATRAM Global Multi-Asset Income Feeder Fund, which feeds into the JP Morgan Global Income Fund. This fund allocates investments across dividend-paying stocks (35%), investment-grade bonds (25%), and high-yield fixed-income assets (40%). Essentially, it’s a mix of dividend-yielding stocks and different debt instruments designed to generate regular income. READ: [Finterest] Are global tech funds the missing piece in your investment portfolio?

Singlife projects a 7% annual return, though this is not guaranteed and depends on market performance. ATRAM’s fund delivered a total return of 11.88%, factoring in both NAV appreciation and income paid out on distribution, based on its December 2024 key information and investment disclosure statement or KIIDS. However, it’s important we remind you of the infamous disclaimer: past performance isn’t indicative of future returns.

Getting started requires a relatively low commitment, beginning with either a one-time payment of P30,000 or monthly contributions of P1,500 for a set amount of months.

If you choose to keep your payouts in a Singlife Account, you can earn 5% annual interest rate, with promotional offers that can push this up to 15%. Note though that the terms and conditions caps the “boosted” interest amounts to P1,000 per month.

What to be mindful about

Before you jump into this deal, you have to be aware of the market-related risks that come with any investment-linked insurance plan.

Like we mentioned earlier, the monthly cash payout is not guaranteed. It depends entirely on how the fund performs, which is affected by everything from general economic trends to geopolitical instabilities. If market conditions are unfavorable, your payouts could be reduced or even halted — so don’t buy into this if you’re looking for a 100% reliable income stream.

And while Singlife’s projected 7% return sounds great, it’s not fixed or assured too. Unlike time deposits or bonds, there’s no guarantee that your principal will be preserved if the market faces a downturn.

If your priority in looking for an insurance product is to secure financial protection for your loved ones, a term life insurance policy might provide you better coverage. The Income Multiplier provides at least 105% of your fund value as life insurance in the unfortunate event of your passing, but this may be lower than traditional term life policies that often provide coverage several times your annual income. – Rappler.com