Home Banking & Finance Demand for VUL insurance growing in the Philippines
Demand for VUL insurance growing in the Philippines
MORE FILIPINOS are choosing to purchase variable unit linked (VUL) products over traditional life insurance, Manulife Philippines said, causing insurers to fine-tune their products to meet the growing demand.
At the launch of the local unit of Canada-based Manulife Financial Corp.’s insurance product in Makati on Monday, Manulife Philippines Senior Vice President and Chief Marketing Officer Melissa Henson cited data from the Insurance Commission which showed that majority of the insurance policies sold last year were VUL products.
“In 2018, 73% of policies sold were VUL. It’s actually industry-wide so most insurers these days sell more VUL than the traditional [insurance plans],” Ms. Henson said, noting that the most policies sold by Manulife in the year were also VUL.
According to the official, demand comes naturally with more people looking to invest in something that has growth potential.
“When we put money into something, we are hoping to receive something back…and then we also want our money to grow and it’s really VUL that promises that potential for growth,” she said.
Ms. Henson however that there is no guaranteed return from VULs as these products are reliant on market movements.
“The thing is, because it’s tied to market performance, market movement, there’s never any guarantee of growth. There’s potential but we can’t promise that,” she said.
Ms. Henson said Manulife’s new product called My Vision Plan (MVP) combines the features of both the VUL and the traditional life insurance plan and is available exclusively in the country. The premium for MVP starts at P20,000 per annum.
“We’ve developed this specifically for the Philippine market…So it’s actually custom-developed for our local market,” she said.
Among the guaranteed benefits of the product are cash benefits on top of investments and regardless of market movements; guaranteed lifetime protection once the policy is fully paid; a fixed payment period of five, ten or fifteen years; and an application for up to P1 million coverage.
As of end-2018, the insurance firm posted P2.59 billion in net earnings based on the unaudited statistics submitted by life insurers to the Insurance Commission. — L.W.T. Noble