Connect with us

Hi, what are you looking for?

Economy

Life insurance: A smart investment for uncertain times

By Adrian Paul B. Conoza, Special Features Writer

Uncertainties are inevitable in life — from illnesses, accidents, sudden economic downturns, and, ultimately, death. Not only do these events affect individuals, but more so their families. Such reality has been further stressed when the coronavirus disease 2019 (COVID-19) spread across the globe and suddenly impacted communities, businesses, and households.

These uncertainties, however, can be prepared for by making investments that enable breadwinners to protect their income as well as manage whatever risks that may come in.

For Joseph Mark Y. Ronquillo, senior vice-president and chief of Retail Distribution Division at United Coconut Planters Life Assurance Corp., more known as Cocolife, a wisely picked investment helps consumers secure their earnings as well as allow it to grow.

“In the face of pandemic and other challenges, every Filipino should consider an investment that provides not only an opportunity for your money to grow but will also provide your family income protection in case you, as the breadwinner, are taken out of the picture,” Mr. Ronquillo told BusinessWorld in an e-mail.

Among such investments include life insurance. As local financial literacy website Pesolab noted, life insurance achieves the goals of income protection and risk management. Yet, it goes beyond these purposes as it also helps consumers gain wealth.

“With the rise of products that include cash values or investments, it can be a financial planning strategy to save and grow your money over time,” Pesolab wrote.

This cash value component is what makes life insurance a good investment to embark on, according to financial information portal Investopedia. How it really benefits an insured, however, will depend on whether the policy fits his or her preferences.

“Whether or not life insurance is a good investment for you depends on your individual finances as well as the length you’ll need coverage,” Investopedia stressed in its guide to life insurance.

Choosing wisely

Joseph Mark Y. Ronquillo, senior vice-president and chief of Retail Distribution Division, United Coconut Planters Life Assurance Corp.

With many insurance options to choose from in the market, how can a consumer choose one that is worth investing in?

Mr. Ronquillo advises consumers that their choice should first match their objectives. “The desire to invest should always be driven by what specific needs an investor would like to address such as family income protection, educational fund for the children, retirement fund buildup, and other major goals and purchases,” he said.

Another aspect in which a preferred investment should match with is one’s investment horizon or the total length of time an investor expects to hold a security or investment portfolio. “A match between the choice of investment and investment horizon is a must to avoid problems in the future when you already need to withdraw your money,” Mr. Ronquillo advised.

Lastly, the investment should match with one’s risk appetite or risk tolerance. Basically, low-risk investments (e.g., money market instruments) would normally yield lower returns, while high-risk investments (e.g., equities, stock market) potentially yield higher returns in the long term.

“Every investor should do some kind of introspection before diving into any investments. In terms of investments, they have to also assess whether they are conservative or aggressive or somewhere in between,” Mr. Ronquillo said.

He also noted that clients should always keep abreast of current events as these can affect the current economic situation. By staying informed, they can make informed decisions on what type of investments will fit the current climate.

To keep these investments sound, especially given the current situation, the practice of diversification matters more than ever.

“Since there’s no way to predict how well a particular asset category will perform, setting the right amount of money to different types of investments should be your course of action,” BPI-Philam Life, the bancassurance arm of Philippine American Life and General Insurance Co., Inc. (Philam Life), wrote on its website.

A client should also make sure that debts are settled first so that they do not get in the way of current or new investments. “Your assets may be giving you a good amount of returns, but you won’t be able to maximize your earnings if the interest rate of your credit card bills is slowly chipping away at them,” BPI-Philam Life’s article read.

It helps as well, to regularly consult with financial advisors who can guide one’s investments to the right direction.

As Mr. Ronquillo shared, Cocolife ensures that all clients are given the most tailored advice to suit their specific needs and guide them in making the best decision for them and their family’s well-being.

Various options
Determining one’s objectives, investment horizon, and risk tolerance can greatly help consumers choose the insurance policy that adequately helps them address life’s uncertainties.

Yet, for those who might still find it difficult to determine what insurance product they should choose, Cocolife’s Mr. Ronquillo suggests that a variable life insurance is “ one of the smartest investments there is in the market today,” as it puts together insurance and investment into one policy.

Variable life insurance is defined as a type of permanent life insurance that provides death benefits as well as the ability to build cash funds through an investment component that an insured can manage. Therefore, the insured can control where he can place his investments.

“To put it simply, this is the type of product that can provide you with peace of mind and an opportunity to make your money grow over time,” Mr. Ronquillo said.

The SVP noted that while this kind of insurance product allows the insured to have a protected income, retirement fund, and educational fund, it can also help build wealth for major purchases such as a brand new car, a dream house, and even a dream vacation.

Cocolife’s variable life insurance products are under its FLEXI plans, which are payable in 5, 7, 10, or 20 years and can be configured according to a client’s needs. Products under this line include the FLEXI Investment, FLEXI Protection, FLEXI Retirement, and FLEXI Education plans.

Philam Life, on the other hand, offers a one-pay investment and life insurance plan branded as Money Tree Elite, which ensures guaranteed life insurance coverage of at least 125% of one’s investment.

The firm also offers life insurance plans powered by its wellness program Philam Vitality, which allows clients to enjoy rewards for taking active steps in knowing and improving their health. These products include AIA All-In-One and Family Secure plans.

Philam Life’s other life insurance plans include the Guardian plan and the Family Provider plan. The latter ensures life insurance coverage that does not take a lifetime to pay for, and it also links benefits to investment funds of a client’s choice.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

JAKARTA — Armed with the world’s largest reserves of nickel and a ban on the export of nickel ore, Indonesia is making itself indispensable...

Economy

LONDON — Britain faces its largest ever strike by health workers on Monday as tens of thousands of nurses and ambulance workers walk out...

Economy

SINGAPORE — Polluting single-use plastic production rose by 6 million tons per year from 2019 to 2021 despite tougher worldwide regulations, with producers making...

Economy

BAMAKO — The Malian interim government on Sunday said the head of the United Nations (UN) peacekeeping mission’s human rights division had 48 hours...

Economy

LVIV — Ukraine has sent letters to companies that back the International Olympic Committee (IOC) urging them to keep Russian athletes out of the...

Economy

SYDNEY — Australian Prime Minister Anthony Albanese will push for bipartisan support on a referendum that aims to set up an Indigenous consultative committee...

You May Also Like

Investing

Browsing history makes referring to sites and pages you’ve visited in the past seamless. It’ll help you recall what page you checked out on...

Investing

The minute that any question pops into your head, you can simply ask Google. No longer do we have to pour over books and...

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.