Preparing for the future through proper wealth management | The Exchange
Headwinds brought about by the COVID-19 pandemic and other uncertainties highlight the importance of preparing ahead for our loved ones. What is the way forward?
Let's have an exchange with Sun Life Philippines' head of new market development June Jus Book.
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Let's have an exchange with Sun Life Philippines' head of new market development June Jus Book.
Visit our website for more #NewsYouCanTrust: https://www.cnnphilippines.com/
Follow our social media pages:
• Facebook: https://www.facebook.com/CNNPhilippines
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NewsTranscript
00:00 Headwinds brought about by the COVID-19 pandemic and other uncertainties highlight the importance
00:06 of preparing ahead for our loved ones.
00:09 What is the way forward?
00:10 Let's now have an exchange with JJ Book, the head of new market development at SunLife
00:17 Philippines.
00:18 JJ, great to have you with us.
00:20 My pleasure, Rico.
00:21 So how important is it to properly manage one's hard-earned wealth and cash, especially
00:29 during challenging times?
00:31 Definitely very important.
00:32 We can appreciate this better if we look back at the height of the pandemic in the year
00:36 2020.
00:37 If you look at corporations or households that were able to build up significant amount
00:41 of savings, for the companies they were able to not just continue with their business,
00:46 but they were even able to help their employees during these times.
00:51 Some of them were even able to capitalize on opportunities in the middle of the pandemic.
00:55 Same thing for households with very heavy savings, they were able to continue their
01:00 quality of life.
01:02 So saving for the future really is about covering for unforeseen events and ensuring that your
01:09 planned goals will remain to be fulfilled.
01:12 A lot of unforeseen events, right?
01:14 Especially during the pandemic, it was an unknown what was going to happen next.
01:18 So a lot of our Kababayans, a lot of our Filipinos decided, "Hey, we have to start saving and
01:23 we have to prepare ahead."
01:26 And you also have to look for milestones like retirement, for sure.
01:31 So when it comes to retirement, there are several ways of addressing that.
01:35 And I believe the pandemic has somehow changed that for some people.
01:40 There have been realizations.
01:41 Prior to the pandemic, people were more aggressive, I would say.
01:45 But because of the effect of the pandemic to businesses, to profits, to the stock market,
01:52 many people became conservative.
01:54 They realized that they weren't that aggressive.
01:58 So risk-taking abilities were all of a sudden became updated.
02:02 Portfolios needed to be rebalanced.
02:05 So that being said, from taking a more aggressive stance, more people would now opt for a slow
02:11 and steady path towards retirement because retirement is something that's inevitable.
02:15 But when you always think of retirement, when you think of savings, sometimes, JJ, it's
02:21 no easy feat.
02:24 You really have to, on a daily basis, you have to set aside money for education, for
02:31 other expenses that you have to deal with on a daily basis.
02:35 Where do product solutions like Sun Legacy now come into the picture?
02:38 Yes, definitely.
02:39 Thanks for that question.
02:40 Now, there are products that are precisely, definitely designed for this purpose.
02:48 It gives you, you mentioned Sun Legacy, it gives you that annual guaranteed payouts,
02:54 or gains of the premiums that you pay.
02:56 And when I say annual, that's every year until age 100.
03:01 And it starts immediately a year after you're done paying the premiums.
03:05 You can pay it either one time, or two years, or five years.
03:08 It's one of those unique products that also comes with a good insurance coverage.
03:13 When I say good insurance coverage, it's 125% of the total premiums that you put in it.
03:18 Now, on top of the guaranteed annual payouts, it also gives dividends.
03:22 Now, we computed for the internal rate of return of the premiums that are paid in this
03:28 product.
03:29 The simple logic to this is that money grows by around 3 to around 3.9% every year, which
03:36 is fairly good if you look at the historical growth of money in, let's say, a bank time
03:40 deposit.
03:41 When is the best time to put your money in a Sun Legacy insurance product?
03:48 Well, I guess you know the answer to this question, and the answer to that is now, definitely.
03:52 If you procrastinate, you know in the world of insurance, the more you delay it, the life
03:57 insurance premiums become more expensive.
03:59 The earlier the better.
04:00 The earlier the better.
04:01 I'll share with you this story which is being used by many of our clients who buy this product.
04:07 Many of them are grandparents.
04:09 Their priority, one of their priorities is wealth transfer.
04:11 They know that their insurance premiums are already quite expensive given their age, if
04:15 they're 65, 70s and above.
04:18 So they buy this product.
04:19 They're policyholders, but the ones insured that they assign are their adult children,
04:24 let's say a 40-year-old son, and the beneficiary is their grandchild, let's say a 10-year-old
04:28 grandchild.
04:29 So they get the payouts and dividends, that's the grandparents, and in the time that when
04:36 they pass on already, then the ownership of the policy transfers to their adult child.
04:43 So like several generations benefiting from just one policy.
04:48 Sometimes it's even better to pay for the whole policy because when you pay on an annual
04:51 basis, clients always think, "Can I pay that premium this year, next year, or the following
04:59 years?"
05:00 How do you help your clients who are facing these kinds of challenges?
05:04 Well, for the product that we're talking about, the good thing about that is that it has a
05:07 one-time pay option.
05:10 And even for our other products that are meant to be paid in several years, there are options
05:14 for them to shorten the paying period.
05:17 So we help them by, let's say if they opt to pay a five-pay plan in just a year, there's
05:22 a premium, a discount that they get if they pay it for a year.
05:28 And if they want to do that, then we also help them in building cash so that they can
05:33 pay it in a shorter period of time.
05:35 And for those who want to know more about Sun Life Philippines insurance products, how
05:41 can they reach you?
05:43 JJ Book.
05:44 Well, other than me, what I'd like to also mention is that we do have more than 21,000
05:50 financial advisors around the country.
05:54 And the easiest way to really get in touch with Sun Life is through our website.
05:58 Just log on to sunlife.com.ph.
06:01 Many of your questions will be answered there.
06:03 We do have financial calculators there.
06:05 You can talk to a Sun Life representative through that website.
06:08 And of course, you can reach us through our head office numbers.
06:11 And are more of our Cababayans now taking up these insurance products for their protection
06:17 and for the future of their families?
06:20 Definitely.
06:21 We do see more and more Filipinos buying insurance, making it part of their financial portfolios.
06:26 But I'd also like to mention that the Philippines remain to be underpenetrated when it comes
06:31 to insurance.
06:33 In the Philippines, only 1.7 percent of the population have insurance.
06:37 You compare that to the neighboring countries like Thailand, they're 5.5 percent.
06:41 Vietnam is more on the 3.3 percent.
06:44 So we do have a lot of ground to cover here in the Philippines when it comes to insurance
06:48 coverage.
06:49 But we're happy that we're seeing more and more Filipinos add insurance in their portfolios
06:54 as a source of stability and solution for wealth transfer needs.
06:58 JJ, this is indeed very good news.
07:02 Thank you so much for this Wealth Management Exchange.
07:04 JJ Book, the head of new market development at Sun Life Philippines.