Sun Life steps up hybrid policy sales

MANILA, Philippines—Life insurance giant Sun Life of Canada has rolled out a new product linked to professionally managed funds, targeting financially sophisticated investors with at least P500,000 in spare money.

The new product, called “Sun Maxilink One,” is a single-premium variable unit-linked (VUL) insurance policy without front-end charges, which means that the earning potential of the investment is maximized because of faster build-up of funds, Sun Life chief marketing officer Mylene Lopa said in an interview.

A VUL insurance policy—a hybrid between traditional life insurance and mutual funds—becomes variable as investment returns are dependent on the market performance of the fund where the premium is invested.

Sun Maxilink One secures the life of the insured with coverage equivalent to at least 125 percent of the single premium, less 125 percent of withdrawals, up to age 88. For policies issued under the guaranteed offer, insurance benefits shall be limited to the fund value plus insurance charges paid in the event of the insured client’s demise within the first two years of policy issue date, except if the death is due to an accident.

“This is the only VUL [offered by Sun Life] that has no initial charges,” Lopa said. “The full single premium is invested right away and if you want to maximize investment, hold it for five years.”

The target market for this product is the AB economic segment aged 35 to 50, such as businessmen, entrepreneurs, junior or senior executives and overseas Filipinos. “We’re solidifying our hold of the AB market,” Lopa said, adding this product would be an alternative option for those only keeping their excess funds in low-yielding time deposits or those with maturing pre-need plans.

Bernardo Purisima, head of product management, said the product allows a guaranteed issue of up to P15 million without going through the underwriting process. But clients aged 51 up to 65 will have to go through the regular underwriting process that includes medical examinations.

Clients are given the flexibility of investment options to match their risk appetite. There are three funds to choose from:

1.) growth fund, which investments mainly in high-quality Philippine stocks;

2.) income fund, which investments mainly in high-quality fixed income securities issued by the Philippine government and local corporate debt; and

3.) opportunity fund (balanced fund), which invests in a mix of high-quality debt and equity securities of local issuers.

The product also provides for a “loyalty” bonus, which rewards the insured for keeping the policy active for at least 10 years with a bonus equivalent to 2 percent of the policy’s average fund value for the past five years. This loyalty bonus is payable at the end of the 10th year and every five years thereafter as long as the policy is in force.