From Underperforming to Thriving: How to Revitalize Your VUL’s Investment Component

Prevent your VUL's investment component from underperforming longer. It's time to take control. Learn the essential strategies to revitalize your policy and transform it from a burden to a thriving source of growth.

You've been faithfully paying for your Variable Unit-Linked (VUL) insurance policy for years, but lately, you've been wondering if it's really working for you. Maybe you've noticed that, while the insurance coverage remains intact, the investment fund value is not where you want it to be. The performance may not be what you expected, or your financial priorities have shifted since you first bought the policy.

The thought has probably crossed your mind: "Should I just withdraw my money and cut my losses?"

If this sounds familiar, you're not alone – many VUL policyholders face this crossroads. But before making any decisions, it’s worth exploring a strategy that could help you regain control and make the most of your policy.

A VUL policy is a powerful tool that combines life insurance protection with an investment component, offering the potential for fund value growth. However, like any investment, it needs occasional fine-tuning to stay aligned with your financial goals. It may be tempting to withdraw, but it might not always be the best solution and can sometimes have unintended consequences. Exploring your alternatives first can help you make a more informed decision.

One strategic approach is to assess your current VUL fund allocation and consider switching your VUL funds to other fund options.

Why Choose Fund Switching Over Withdrawal

Fund switching is reallocating your policy’s investment component from one fund to another to align your portfolio with your current risk tolerance and financial objectives. This is particularly useful in a dynamic market environment where certain funds may be underperforming while others are gaining momentum.

Fund switching allows you to recalibrate your VUL funds to better pursue your targets without compromising your policy. For instance, when the fund unit price is high, you can opt to switch to a more conservative fund to protect your gains; and when the unit price is low, you can switch to a more aggressive fund to make your money work harder.

Fund switching also keeps your money within the policy. With this, you get to preserve its benefits, including the life insurance coverage. On the other hand, withdrawing from your VUL can decrease the policy’s fund value, potentially leading to a lapse if the remaining value is insufficient to cover future policy charges.

Fund switching allows you to avoid additional charges or fees compared to withdrawals. You can rebalance your VUL funds without these costs, which withdrawing funds may trigger.

How to Strategically Switch Your VUL Funds

The process of fund switching can be simple and effective with the guidance and assistance of your trusted Sun Life financial advisor. A Sun Life advisor’s primary goal is to be your trusted Partner for Life, fulfilling any request to help you switch your VUL funds. Their advice is rooted in a deep understanding of your financial goals, a commitment to your best interests, and ensuring that you remain financially protected. You may also opt to visit any of the Sun Life Client Service Centers for assistance with the VUL fund switching.

Here’s how they can help you navigate this process:

1. Review your goals, assess your risk tolerance, and consider your time horizon.

Your advisor will first help you revisit your financial goals. Are you saving for a child’s education, a new home, or retirement? Your original investment strategy may no longer be the most suitable for your current targets. After reviewing your goals, reassess your risk tolerance together to determine if a more conservative or aggressive VUL fund is appropriate for you. More aggressive VUL funds are suitable for Clients with a longer time horizon and higher risk appetite while conservative VUL funds are for those with medium term horizon and lower risk appetite.

2. Analyze VUL fund performance.

Sun Life offers a variety of VUL funds, each with different investment objectives and risk profiles. Your advisor can provide you with the latest performance data and insights on each fund to help you make an informed decision. They can show you the performance of the different VUL funds to help you choose what suits your recalibrated strategy. For instance, some global funds have returned more than 10% over the past year. However, it's important to note that past performance does not guarantee future results, and investment returns can fluctuate especially over shorter periods of time. Stay updated with opportunities for your VUL funds by clicking here.

3. Monitor and adjust.

Fund switching is not a one-time event. It is a key part of an ongoing strategy. As your trusted Partner for Life, your Sun Life advisor will continue to monitor the performance of your chosen funds and will advise you on future adjustments, as needed, to help you stay on track with your financial goals. You may also opt to review your own funds by monitoring them in the My Sun Life PH Client Portal and Mobile App.

Remember, your Sun Life VUL policy is designed to be a flexible, long-term financial solution. By working closely with your advisor, you can use fund switching as a proactive tool to adapt to changing markets and personal goals, ensuring that your policy continues to work hard for you.

Talk to your advisor for more details about Fund Switching. You can switch funds for free up to four times a year. To learn more about VUL, visit our VUL 101.