VUL investment funds in the Philippines

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What are the VUL funds offered by Philippine insurers? How do you calculate the fund value of a VUL investment fund?

VULs are financial products that combine insurance and investment. The insurance part provides a safety net through cash benefits in the event of untimely death and/or medical emergencies. The investment part allows savings to grow by earning passive income. So how does one know whether the investment part is gaining or losing?

This article is going to show the steps to compute the fund value of any VUL.

VUL account value

Variable universal life or VUL is a type of insurance product that allows investing a portion of the premium. The premium is the amount paid in purchasing the product. It can be paid on a limited or regular basis, or in the case of single pay VUL it can be paid once.

The more the premium is paid the more goes into investing, and whatever amount that is accumulated becomes the Fund Value or Account Value.

There is one other way to boost investment aside from paying the premium. The policy-holder can also put more money, which is called a top-up. A top-up is any additional amount put into the plan and added to the account value.

However, any money put into a VUL is subject to charges. A few of the charges are the following.

  • Insurance charge. This is the charge that goes into paying the insurance component.
  • Administrative charge. As the name suggests, it is paid to the insurer for managing the policy.
  • Fund management charge. This annual fee is paid for the expense in managing the chosen investment fund.
  • Surrender charge. The surrender charge is incurred when the policy is closed and entire fund withdrawn within a sort of “lock-in” period. Some policies 5 years.
  • Partial withdrawal fee. While surrender charge is levied when the policy is terminated, the partial withdrawal fee is incurred when a portion of the fund is redeemed within the lock-in period.
  • Fund switching or fund allocation fee. The fee is charged when money from one fund is transferred to another. The first two switches are generally free, so the fee applies when there are two switches done in a year.

What is the importance of VUL Account Value?

The account value is important. If it goes to zero, the policy might be terminated. It can be the result of several withdrawals, poor fund performance, accumulation of charges, a combination of any or all of these factors. A top-up may be required to keep the account going.

Another thing is that the account value comprises the investment component of the policy. It is used to invest in variable funds. Without it, there is no means for the policy-holder to earn.

Lastly, the money that can be withdrawn comes from the account value. In fact, when the policy is surrendered (terminated) and whenever it is allowed by the terms of the policy, it is issued to the policy-holder minus all charges.

What are Variable or VUL funds

The Fund Value is invested into variable or VUL funds. These are investment funds that are structured as an unit investment trust fund (UITF). They pool money together which is then used to trade (buy or sell) assets such as stocks, bonds, and money market instruments with the expectation of increasing value for all investors.

Types of VUL funds

There are many types of variable funds. The ones available in the market are in peso or dollar denomination. They may be invested in assets in local or foreign markets.

Generally, they can be grouped into the kind of underlying assets they are trading, such as:

The above list can also be distinguished by the type of investors to whom they may be suitable.

Bond funds and money market funds commonly are for people who may have low tolerance to risks and are willing to expect modest returns. On the other hand, equities funds and index funds are most of the time considered a fit for people who are willing to tolerate some level of risks in exchange for potential high returns. The balanced fund is both a combination of bond/money market and equities funds, so people with moderate risk appetite might consider them.

You are allowed to switch funds as you see fit. Most insurers will allow two free switches, after which any switches will be subject to applicable charges.

How do VUL funds earn?

The earnings of variable funds depend on the constituent financial assets. For instance, those that are trading stocks may be able to gain from the dividends issued and increase of the price of the stocks. Bond funds earn from the interests paid by the issuers of the bonds, which are essentially a proof of indebtedness.

Risks

Risks are inherent in any form of investing. In variable funds, these risks arise from the underlying assets and can arise from such causes like prevailing interest rate, economy, general market sentiments, policies, and other factors. Hence, capital loss is possible.

Net asset value

To compare the performance of variable funds, the net asset value is used. It is the result of the fund’s assets minus liabilities. It is usually expressed as NAVPU or net asset value per unit of participation. The NAVPU is obtained by dividing the net asset value by the number of issued unit of participation.

The valuation of NAVPU is computed daily. It is the price at which the investors will pay when putting their money into the fund. Inversely, it is also the price at which the investors will be paid when they are redeeming their money.

Unit of participation

VUL policy-holders will have units of participation. Each unit is a proof that they are participating in the fund. That is, they are entitled to the returns (whether it is a gain or a loss) of the fund. The unit of participation does not give shareholders power to the policy-holders such as the right to vote the board of directors, which is one key difference from owning a company stock.

How do you compute the account value of a VUL policy?

What are the steps in obtaining the account value of a VUL plan? You don’t really need to manually compute its value. Insurers will provide an updated status of the policy either regularly or whenever you request for one.

However, you may want to keep your own computation. The following can be a helpful guide on how to proceed.

1. Determine the number of units of participation.

The first thing is to know how many units are issued. The number of units will depend on how much remains of the premium when charges are deducted.

In the example of a single pay VUL as shown in the table, the premium is ₱100,000. The charges are ₱5,000. The account value then is ₱95,000. The NAVPU of the variable fund at the time of the account opening is ₱10. A total of 9,500 units of participation is issued to the plan.

DetailsFormulaAmount
Premium100,000
Charges5,000
Account value100,000 – 5,00095,000
NAVPU10
Unit of participation95,000 ÷ 109,500

For regular-pay, limited pay VULs, and top-ups, follow the steps above. Two things that are important to obtain from the insurer are the total charges and NAVPU of the chosen fund.

2. Get current NAVPU

Would like to see how much your account has grown? It would be fairly simple to calculate. Make sure that you get the latest NAVPU of the fund. The information may be available on the insurer’s website.

Important: if you are withdrawing or closing the account, insurers may require a number of days from the day the request is received to the the actual redemption. Check with insurer on the terms and conditions.

3. Compute the current fund value

The account value is the product of the current NAVPU and the number of units of participation. This is how

DetailsFormulaAmount
Units of participation9,500
Current NAVPU12.50
Current Account Value9,500 x 12.50118,750

4. Compute for gain or loss

The gain or loss is imply the difference between the current Account Value and the Account Value when the units where issued. In this case, it is ₱18,750 (118,750 – 100,000).

5. Compute for return on investment (ROI)

The return on investment or ROI is computed by dividing the gain or loss by the premium expressed in percentage. In this case, it is 18.75% (18,750 ÷ 100,000 x 100%).

Variable or VUL Funds in the Philippines

See below the list of variable or VUL funds from major Philippine insurers

CompanyFunds
Allianz PNB Life Insurance, lnc.Dollar Fixed Income
Allianz PNB Life Insurance, lnc.Dollar Flexi Asia Bond
Allianz PNB Life Insurance, lnc.Dollar Flexi Asia Dividend Paying Bond
Allianz PNB Life Insurance, lnc.Dollar Global Equity
Allianz PNB Life Insurance, lnc.Dollar Global Equity Plus
Allianz PNB Life Insurance, lnc.Dollar Global Income Dividend Paying
Allianz PNB Life Insurance, lnc.Dollar Global Opportunistic Dividend Paying Bond
Allianz PNB Life Insurance, lnc.Dollar Income and Growth
Allianz PNB Life Insurance, lnc.Dollar Income and Growth Dividend Paying
Allianz PNB Life Insurance, lnc.Global Treasures
Allianz PNB Life Insurance, lnc.High Street Peso
Allianz PNB Life Insurance, lnc.Peso Balanced
Allianz PNB Life Insurance, lnc.Peso Dynasty Equity
Allianz PNB Life Insurance, lnc.Peso Equity
Allianz PNB Life Insurance, lnc.Peso Fixed Income
Allianz PNB Life Insurance, lnc.Peso Money Market
Allianz PNB Life Insurance, lnc.Peso Multi Sector Equity
Allianz PNB Life Insurance, lnc.Peso Optimized Dividend Equity
Allianz PNB Life Insurance, lnc.Peso-Hedged Asian Multi Income Plus Dividend Paying
Allianz PNB Life Insurance, lnc.Peso-Hedged Diversified Income Dividend Paying
Allianz PNB Life Insurance, lnc.Peso-Hedged Global Sustainability Equity
BDO Life Assurance Company, Inc.Dollar Conservative Fund
BDO Life Assurance Company, Inc.Dollar Diversity Balanced Fund
BDO Life Assurance Company, Inc.Dollar Diversity Growth Fund
BDO Life Assurance Company, Inc.Dollar Standby Fund
BDO Life Assurance Company, Inc.Global Brands Select Fund
BDO Life Assurance Company, Inc.Natixis Best of U.S. Sectors Fund
BDO Life Assurance Company, Inc.Peso Aggressive Fund
BDO Life Assurance Company, Inc.Peso Conservative Fund
BDO Life Assurance Company, Inc.Peso Dragon Equity Fund
BDO Life Assurance Company, Inc.Peso Equity Index Fund
BDO Life Assurance Company, Inc.Peso Moderate Fund
BDO Life Assurance Company, Inc.Peso Standby Fund
BPI-Philam Life Assurance CorporationALFM Dollar Bond Fund
BPI-Philam Life Assurance CorporationALFM Peso Bond Fund
BPI-Philam Life Assurance CorporationBPI-Philam Active Allocation Fund
BPI-Philam Life Assurance CorporationBPI-Philam Balanced Fund
BPI-Philam Life Assurance CorporationBPI-Philam Equity Index Fund
BPI-Philam Life Assurance CorporationBPI-Philam Equity Index Fund 2
BPI-Philam Life Assurance CorporationBPI-Philam Equity Value Fund
BPI-Philam Life Assurance CorporationBPI-Philam Global Bond Fund
BPI-Philam Life Assurance CorporationBPI-Philam Global Equity Fund
BPI-Philam Life Assurance CorporationBPI-Philam Growth Fund
BPI-Philam Life Assurance CorporationBPI-Philam Growth Fund 2
BPI-Philam Life Assurance CorporationBPI-Philam Odyssey Asia Pacific High Dividend Equity Fund
BPI-Philam Life Assurance CorporationBPI-Philam Odyssey Balanced Fund
BPI-Philam Life Assurance CorporationBPI-Philam Odyssey Bond Fund
BPI-Philam Life Assurance CorporationBPI-Philam Odyssey High Conviction Equity Fund
BPI-Philam Life Assurance CorporationBPI-Philam Odyssey Philippine Dollar Bond Fund
BPI-Philam Life Assurance CorporationBPI-Philam Peso Bond Fund
BPI-Philam Life Assurance CorporationBPI-Philam Philippine High Dividend Equity Fund
BPI-Philam Life Assurance CorporationBPI-Philam US Dollar Bond Fund
BPI-Philam Life Assurance CorporationBPI-Philam US Dollar Bond Fund 2
BPI-Philam Life Assurance CorporationBPI-Philam US Equity Fund
BPI-Philam Life Assurance CorporationBPI-Philam World Equity Fund
Etiqa PhilippinesETIQA PH Dollar Global Bond Dividend Paying Fund
Etiqa PhilippinesETIQA PH Peso Asia Equity Dividend Paying Fund
First Life Financial Company, lnc.1st Peso Balance Fund
First Life Financial Company, lnc.1st Peso Bond Fund
First Life Financial Company, lnc.1st Peso Equity Fund
First Life Financial Company, lnc.Dollar Global Balanced Fund
First Life Financial Company, lnc.High Dividend Equity Fund
FWD Life InsuranceCorporationDiversity Fund
FWD Life InsuranceCorporationGlobal Good Peso ESG Fund
FWD Life InsuranceCorporationGlobal Good USD ESG Fund
FWD Life InsuranceCorporationGlobal US Dollar Equity Index Fund
FWD Life InsuranceCorporationPeso Balanced Fund
FWD Life InsuranceCorporationPeso Bond Fund
FWD Life InsuranceCorporationPeso Equity Fund
FWD Life InsuranceCorporationPeso Equity Index Fund
FWD Life InsuranceCorporationPeso Fixed Income Fund
FWD Life InsuranceCorporationPeso Growth Fund
FWD Life InsuranceCorporationPeso High Dividend Equity Fund
FWD Life InsuranceCorporationPeso Stable Fund
lnsular Life Assurance Company, Ltd., TheBalanced Fund
lnsular Life Assurance Company, Ltd., TheEquity Fund
lnsular Life Assurance Company, Ltd., TheFixed Income Fund
lnsular Life Assurance Company, Ltd., TheGrowth Fund
lnsular Life Assurance Company, Ltd., TheGuardian Fund
lnsular Life Assurance Company, Ltd., TheOne Fund
lnsular Life Assurance Company, Ltd., ThePeso Global Equity Fund
lnsular Life Assurance Company, Ltd., ThePeso Global Technology Fund
lnsular Life Assurance Company, Ltd., ThePeso Money Market Fund
lnsular Life Assurance Company, Ltd., TheRecovery Equity Fund
lnsular Life Assurance Company, Ltd., TheSelect Equities Fund
Manufacturers Life Ins. Co. (Phils.), Inc., ThePeso Secure
Manulife Chinabank Life Assce. Corp.ASEAN Growth Fund
Manulife Chinabank Life Assce. Corp.Asia Pacific Bond Fund
Manulife Chinabank Life Assce. Corp.Emperor Fund
Manulife Chinabank Life Assce. Corp.Global Target Income Fund
Manulife Chinabank Life Assce. Corp.Peso Cash Fund
Manulife Chinabank Life Assce. Corp.Peso Diversified Value
Manulife Chinabank Life Assce. Corp.Peso Dynamic Allocation
Manulife Chinabank Life Assce. Corp.Peso Growth
Manulife Chinabank Life Assce. Corp.Peso Wealth Optimizer 2026 Fund
Manulife Chinabank Life Assce. Corp.Peso Wealth Optimizer 2031 Fund
Manulife Chinabank Life Assce. Corp.Peso Wealth Optimizer 2036 Fund
Manulife Chinabank Life Assce. Corp.PHP Asia Pacific Property Income Fund
Manulife Chinabank Life Assce. Corp.PHP Global Preferred Securities Income Fund
Manulife Chinabank Life Assce. Corp.PHP Tiger Growth Fund
Manulife Chinabank Life Assce. Corp.PHP US Growth Fund
Manulife Chinabank Life Assce. Corp.Powerhouse Fund
Manulife Chinabank Life Assce. Corp.Target Distribution Fund
Manulife Chinabank Life Assce. Corp.USD Asia Pacific Property Income Fund
Manulife Chinabank Life Assce. Corp.USD Global Preferred Securities Income Fund
Manulife Chinabank Life Assce. Corp.USD Secure
Manulife Chinabank Life Assce. Corp.USD Tiger Growth Fund
Manulife Chinabank Life Assce. Corp.USD US Growth Fund
Philippine AXA Life Insurance. Corp.Asia Growth Fund
Philippine AXA Life Insurance. Corp.Global Advantage Fund
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Global Dynamic Allocation Fund – Growth
Philippine AXA Life Insurance. Corp.Philippine Peso Liquidity Fund
Philippine AXA Life Insurance. Corp.Target Date Fund / Retire Smart Fund 2030
Philippine AXA Life Insurance. Corp.Target Date Fund / Retire Smart Fund 2031
Philippine AXA Life Insurance. Corp.Target Date Fund / Retire Smart Fund 2032
Philippine AXA Life Insurance. Corp.Target Date Fund / Retire Smart Fund 2033
Philippine AXA Life Insurance. Corp.Target Date Fund / Retire Smart Fund 2034
Philippine AXA Life Insurance. Corp.Target Date Fund / Retire Smart Fund 2035
Philippine AXA Life Insurance. Corp.Target Date Fund / Retire Smart Fund 2036
Philippine AXA Life Insurance. Corp.Target Date Fund / Retire Smart Fund 2037
Philippine AXA Life Insurance. Corp.Target Date Fund / Retire Smart Fund 2038
Pioneer Life lnc.DollarPro
Pioneer Life lnc.MoneyMarket
Pioneer Life lnc.PesoPro
Pioneer Life lnc.PHP Equity Fund
Pioneer Life lnc.PHP Managed Fund
Pioneer Life lnc.USD Bond Fund
Pru Life Insurance Corp. of U.K.MoneyMarket
Pru Life Insurance Corp. of U.K.PRULink Asia Pacific Equity Fund – US dollar
Pru Life Insurance Corp. of U.K.PRULink Asian Balanced Fund – US dollar
Pru Life Insurance Corp. of U.K.PRULink Asian Local Bond Fund – US dollar
Pru Life Insurance Corp. of U.K.PRULink Bond Fund – Peso
Pru Life Insurance Corp. of U.K.PRULink Bond Fund – US dollar
Pru Life Insurance Corp. of U.K.PRULink Cash Flow Fund – US dollar
Pru Life Insurance Corp. of U.K.PRULink Cash Flow Fund Hedged Share Class – Peso
Pru Life Insurance Corp. of U.K.PRULink Equity Fund – Peso
Pru Life Insurance Corp. of U.K.PRULink Equity lndex Tracker Fund* – Peso
Pru Life Insurance Corp. of U.K.PRULink Global Emerging Markets Dynamic Fund – US dollar
Pru Life Insurance Corp. of U.K.PRULink Global Market Navigator Fund – Peso Unhedged
Pru Life Insurance Corp. of U.K.PRULink Growth Fund – Peso
Pru Life Insurance Corp. of U.K.PRULink Managed Fund – Peso
Pru Life Insurance Corp. of U.K.PRULink Money Market Fund – Peso
Pru Life Insurance Corp. of U.K.PRULink Proactive Fund – Peso
Sun Life of Canada (Philippines), Inc.Balanced Fund
Sun Life of Canada (Philippines), Inc.Bond Fund
Sun Life of Canada (Philippines), Inc.Captains Fund
Sun Life of Canada (Philippines), Inc.Dollar Bond Fund
Sun Life of Canada (Philippines), Inc.Dollar Money Market Fund
Sun Life of Canada (Philippines), Inc.Dynamic Fund
Sun Life of Canada (Philippines), Inc.Equity Fund
Sun Life of Canada (Philippines), Inc.Global Growth Fund
Sun Life of Canada (Philippines), Inc.Global Income Fund
Sun Life of Canada (Philippines), Inc.Global Opportunity Fund
Sun Life of Canada (Philippines), Inc.Global Opportunity Payout Fund
Sun Life of Canada (Philippines), Inc.Growth Fund
Sun Life of Canada (Philippines), Inc.Growth Plus Fund
Sun Life of Canada (Philippines), Inc.Income Fund
Sun Life of Canada (Philippines), Inc.Index Fund
Sun Life of Canada (Philippines), Inc.Money Market Fund
Sun Life of Canada (Philippines), Inc.MyFuture 2025 Fund
Sun Life of Canada (Philippines), Inc.MyFuture 2030 Fund
Sun Life of Canada (Philippines), Inc.MyFuture 2035 Fund
Sun Life of Canada (Philippines), Inc.MyFuture 2040 Fund
Sun Life of Canada (Philippines), Inc.MyFuture 2045 Fund
Sun Life of Canada (Philippines), Inc.MyFuture 2050 Fund
Sun Life of Canada (Philippines), Inc.MyFuture 2055 Fund
Sun Life of Canada (Philippines), Inc.Opportunity Fund
Sun Life of Canada (Philippines), Inc.Opportunity Tracker Fund
Sun Life of Canada (Philippines), Inc.Sun Dollar Maximizer – PriMO 2 Fund
Sun Life of Canada (Philippines), Inc.Sun Dollar Maximizer – PriMO Fund
Sun Life of Canada (Philippines), Inc.Sun Dollar Maximizer – WT Fund
Sun Life of Canada (Philippines), Inc.Sun Peso Maximizer Fund***
Sun Life of Canada (Philippines), Inc.Sun Peso Maximizer Fund-Primo 2 Fund***
SunLife Grepa Financial, Inc.SLG Balanced Fund
SunLife Grepa Financial, Inc.SLG Bond Fund
SunLife Grepa Financial, Inc.SLG Captains Fund
SunLife Grepa Financial, Inc.SLG Equity Fund
SunLife Grepa Financial, Inc.SLG Global Income Fund
SunLife Grepa Financial, Inc.SLG Global Opportunity Fund
SunLife Grepa Financial, Inc.SLG Growth Fund
SunLife Grepa Financial, Inc.SLG Growth Plus Fund
SunLife Grepa Financial, Inc.SLG Income Fund
SunLife Grepa Financial, Inc.SLG Index Fund
SunLife Grepa Financial, Inc.SLG MyFuture Fund
SunLife Grepa Financial, Inc.SLG Opportunity Fund
United Coconut Planters Life Assce. Corp.Dollar Bond Fund
United Coconut Planters Life Assce. Corp.Peso Bond Fund
United Coconut Planters Life Assce. Corp.Peso Equity Fund
United Coconut Planters Life Assce. Corp.Peso Fixed Income Fund
United Coconut Planters Life Assce. Corp.Peso Guaranteed Fund
United Coconut Planters Life Assce. Corp.Peso Income Growth Fund
United Coconut Planters Life Assce. Corp.Peso Long Term Guaranteed Fund
United Coconut Planters Life Assce. Corp.Peso Medium Term Guaranteed Fund
United Coconut Planters Life Assce. Corp.US Dollar Guaranteed Fund
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