Philamlife launches investment-style life insurance product

The Philippine American Life and General Insurance Co. (Philamlife) has joined the growing number of life insurance companies in the country to introduce life insurance that is both an investment and savings product.

Generically known as variable life insurance, it not only offers the usual life insurance benefits. In fact, a portion of the premiums are placed into investment funds after consulting with the insured.

Thus variable insurance transcends the classical form of cash after a tragedy, to cash that the insured– still living– can actually utilize.

And it becomes critical for the insurer offering variable life products to have the investment infrastructure. And that is what Philamlife claims to have.

Philamlife executive vice president Rex Mendoza said that the insurer made investments worth P46 billion in 2002 accounting for the largest share in the investment pie of life insurers in the country.

Investment income in the same year was registered at P5.8 billion or 41 percent of the market.

Investments are handled by financial experts of the Philamlife group such as the Philam Asset Management Inc. (PAMI). It has a pool of financial advisers that not only passed examinations by the Insurance Commission (IC) but underwent heavy training specifically for the marketing of the variable product.

Mendoza however stressed that agents that sell variable must make it clear that in the variable product they have passed the investment risk to the client when they make their investment choice. "We are in the business for a long term, we can not afford to put our name at risk."

Philamlife has already 300 agents licensed to sell variable products.

Policyholders of the variable product, known as the AIG Money Multiplier, has the option of investing in the Philamlife Fixed Income Fund or the Philamlife Equity Fund.

The fixed income fund is a type of investment that concentrates on the safer albeit lower returns from corporate or government securities. The equity fund offers higher returns for the higher risk appetite of the policyholder cum investor.

In the variable product of Philamlife, the policyholder can also make additional inputs or "top-ups" on their investment portion.

Top-ups are additional premiums which the holder can put in anytime for a minimum amount of P10,000. Thus the top-ups can earn more income while the insurance coverage increases.

Variable life products has long been around Asia but it was only introduced in the Philippines some three years ago.

There are already five life insurers offering their own version of a variable product. They are Prulife of the UK, Sunlife Financials, Manulife Philippines, PhilAxa Life, and Philamlife. – Ted Torres