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VUL Insurance vs Mutual Fund vs UITF Investment

By Fehl Dungo
Many readers were asking about VUL so Ive made this page to
share about VUL insurance vs Mutual Fund vs UITF. Which is better
among the three? What is the best investment? Which will give
you more money?
I have talked about mutual fund vs UITF before and that page
contains the complete differences of the two including their
advantages and disadvantages. To compliment that page, I have
summed up the pros and cons of VUL, MF and UITF as well here so
you can decide well which investment you would choose or
prioritize if you want them all.
Similarities of VUL, UITF and Mutual Fund
In a nutshell, all of them are investment wheels and they are
pooled funds meaning you can earn or lose money depending on
the performance of the fund and the market.
Differences between VUL, Mutual Fund, and UITF
As to what they are:
UITF a.k.a. Unit Investment Trust Fund. The investor participates
in a Trust Fund and he or she can earn or lose money according to
the funds performance.
Mutual Fund the investor becomes a shareholder of the mutual
fund company thus he or she could also have a voting power in
the corporation. The investor can earn or lose money according to
the funds performance.
VUL stands for Variable Universal Life insurance. VUL is both an
investment and an insurance. The investor is insured therefore his
beneficiaries will get money when he died.

As to Regulating Authority:
UITF regulated by the BSP (Bangko Sentral ng Pilipinas)
Mutual Fund regulated by SEC (Securities and Exchange
Commission)
VUL regulated by the Insurance Commission
Where to open an account?
UITF you can open an account to majority of leading banks like
BDO, Metrobank, BPI, PNB, Landbank, UnionBank, and the like.
Mutual Fund they are offered by MF companies like Sunlife
Financial, Philam Asset Management, Inc and also banks like BPI.
VUL some companies like Pru Life UK, Sunlife Financial and AXA.
VUL products are also offered in some banks. I saw Pru Life UK
agents in BDO recently and AXA agents in Metrobank.
Who should you talk to when you open an account?
UITF talk to a trust representative or simply ask the bank
manager.
Mutual Fund talk to a licensed mutual fund advisor or fund
manager.
VUL talk to an insurance agent
How much money do you need to open an investment?
UITF it depends upon the type of fund. There is minimum
amount required to Money Market, Bond Funds, Equity Fund,

Balanced Fund etc. Minimum is usually P10,000, others are


P50,000 and P100,000.
Mutual Fund like UITF, there is a minimum investment to start
a fund depending on the investment product like UITF. You can
start if you have P10,000 too.
VUL because it is also an insurance, you need to pay premiums
and this type of investment is usually expensive.
As to mode of funding:
All these investments offer single-pay and regular-pay
investments. I recommend you study and contemplate about your
investment goal, status, needs, and capacity to invest.
As to taxes:
UITF earnings are already Net Asset Value per Unit (NAVPU)
Mutual Fund your earnings are already net of tax too (NAVPS)
VUL you may not need to pay taxes because the insurance
company is doing this part
As to fees:
UITF no entry fees or upfront fees but there are management
fees and redemption fees
Mutual Fund there can be upfront fees, management fees and
redemption fees depending on the type of MF
VUL there can be upfront fees, management fees and insurance
fees depending on the VUL product
Tips in investing VUL, Mutual Fund and UITF

Deciding which investment to choose still lies on the investors


financial status, investment goal and objectives. It is also
important that the investor knows about mutual funds, stocks,
UITFs and related financial instruments. Dont be hypnotized by
insurance agents and tempting investment offers of some
companies especially the ones you never heard before. Study and
learn first about the funds performance. You can do this by
looking at Bloomberg or simply go to the companys website or
see our latest lists:
Best Mutual Funds Companies in the Philippines 2015
In my opinion, if you already have SSS or GSIS, you can just add
more investments by having either mutual funds or UITF. As an
employee or a business entrepreneur in the Philippines, assuming
you have Pag-ibig too, you already have Mutual Fund because its
HDMF. If you have SSS, you already have insurance. If you are a
government employee, you already have GSIS and insurance
policies. Therefore, you and your beneficiaries already have
protections. VULs main purpose is wealth building plus
protection. If you know where youre standing, then you know
how and what to invest. That is just my opinion.

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