The difference between VUL vs. Mutual Fund

A lot of people would like to invest in stock market but doesn’t have an idea how to start with it. Many have asked what VUL & Mutual is all about. What are their differences? Which is better among the two?

The two are the same as investment vehicle. They are also pooled funds in which you can either win or lose money depending on the performance of the fund and stock market. 

Mutual Fund (MF) – according to Investopedia it is an investment vehicle made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market & other assets which is managed by fund manager experts

Investors becomes a shareholder of the mutual fund company thus he/she could also have a voting power in the corporation depending on his/her number of shares. The investor can earn or lose money according to the fund’s performance

They are offered by Mutual fund companies like Sun life Financial, Philam Asset Management and many others including bank like BPI.

On the other hand,

VUL – ‘Variable Universal Life Insurance’ – according to Investopedia is a permanent life policy + built-in investment program. The plan allows for the investment of the cash value. In short, it is an investment + insurance. The investor is insured therefore his/her beneficiaries will get the money when he passed away.

Investment grows faster than in a traditional savings account. It is suitable for Millenials because it doesn’t require big amount of money to start. Some funds only require Php 1,800/monthly as initial investment. 

Company like FWD, Pru Life UK, Sun Financial & AXA offers this investment vehicle.

Who regulate this investment?

Mutual Fund - Securities and Exchange Commission 

VUL - Insurance Commission

How much money do I need to get started?

Mutual Fund – a minimum investment of Php 5,000 in Col financial. In other broker or company, an initial investment of Php 10,000 depending also to the value of the fund. To get started, talk to a licensed mutual fund advisor or fund manager.

VUL – At a minimum of Php 1,500 per month you can now get protected and have your initial investment. To get started, talk to a licensed insurance agent.

There are fees like upfront fees, management fees & redemption fees depending on the type of MF or VUL product. All these investments offer single-pay and regular-pay investments.

You must determine on what is the purpose of your investment. Knowing this will give you a clear idea what is the best investment vehicle suited for you. It is a MUST for you to study and contemplate about your investment goal, status, needs, and capacity to invest.

To learn more about how to start INVESTING contact the admin or email: pinoyfinancialiq@gmail.com. Visit Facebook page: pinoy financial iq.