Variable universal life insurance and unit investment trust funds.

Variable universal life insurance and unit investment trust funds.

1. Variable Universal Life (VUL) insurance and Unit Investment Trust Funds (UITFs)

2. 1 Describe the investment product

3. Variable Universal Life (VUL) VUL is a type of life insurance that combines a death benefit with an investment component. Policyholders pay premiums, a portion of which goes towards insurance coverage, and the remainder is invested in various investment funds, such as equities, bonds, or money market instruments. The cash value of the policy can fluctuate based on the performance of the underlying investment funds.

4. Unit Investment Trust Funds (UITFs) UITFs are pooled investment funds offered by banks and trust corporations. Investors can purchase units of these funds, which are managed by professional fund managers. UITFs invest in a diversified portfolio of assets, such as stocks, bonds, or a combination of both, depending on the fund's investment objective. Returns from UITFs are based on the performance of the underlying assets.

5. 2 How and Where to Invest

6. Variable Universal Life (VUL) VUL policies are typically offered by insurance companies. Investors can purchase VUL policies through licensed insurance agents or financial advisors who can provide guidance on selecting the appropriate coverage and investment options based on the investor's financial goals and risk tolerance.

7. Unit Investment Trust Funds (UITFs) UITFs are available through banks and trust corporations that offer investment products. Investors can invest in UITFs by opening an account with the institution offering the fund and choosing the UITF that aligns with their investment objectives. Fund managers handle the day-to-day management of UITFs, making investment decisions on behalf of investors.

8. 3 Pros and Cons

9. Variable Universal Life (VUL) Pros: Provides both insurance protection and investment opportunities, flexibility to adjust coverage and investment allocations, potential for tax-deferred growth of cash value. Cons: Generally higher fees compared to traditional life insurance policies, investment returns may be lower than alternative investment options, such as mutual funds or ETFs.

10. Unit Investment Trust Funds (UITFs) Pros: Access to professionally managed investment portfolios, diversification across various asset classes, liquidity to redeem units at any time (subject to redemption fees). Cons: No guaranteed returns, returns may be affected by market fluctuations and fund management fees, investors do not have direct control over investment decisions.

11. 4 How much capital needed

12. Variable Universal Life (VUL) The capital required for VUL insurance varies depending on factors such as the investor's financial goals, risk tolerance, and investment horizon. VUL insurance typically requires regular premium payments, while UITFs may have minimum initial investment requirements that vary by fund.

13. Unit Investment Trust Funds (UITFs) The capital required for UITFs varies depending on factors such as the investor's financial goals, risk tolerance, and investment horizon. VUL insurance typically requires regular premium payments, while UITFs may have minimum initial investment requirements that vary by fund.

14. 5 Whom to offer (based on the risk appetite of the investor)

15. Variable Universal Life (VUL) Suitable for individuals seeking both insurance coverage and long-term investment growth, with a moderate to conservative risk appetite. VUL policies offer a balance between protection and investment potential.

16. Unit Investment Trust Funds (UITFs) Suitable for investors with different risk appetites, as UITFs offer a range of fund options catering to conservative, moderate, and aggressive investment strategies. Investors should select funds that align with their risk tolerance and investment objectives.

17. Thank you! ALBINO, GEE ANN BANATE, JUSTINE BSBA FM 3F