Protection and investment can go hand in hand

Generali Vietnam has freshly launched the unit-linked insurance product named Vita - Live Prosperously. So how is it different from other life insurance products?

Unit-linked is a type of investment-linked insurance product which provides both protection benefits as well as investment opportunities for customers. One of the key differences between unit-linked and other types of life insurance products is its flexibility. Customers are free to choose how they want to invest into different unit-linked funds in accordance with their returns expectations and risk appetite. The other key difference is the fact that investment returns are transparent and reported regularly (usually weekly). Customers are entitled to the results of their investment in the different unit-linked funds but must also bear any associated risks.

Unit-linked is relatively new in Vietnam, but has been a key product segment in many markets in the world and the region. In Vietnam, the first unit-linked product was introduced more than 10 years ago. However not until recent years that it started to attract more attention from consumers, as the Vietnam stock market becomes more vibrant and dynamic.

As such product has gained its popularity for now, are there any other products similar to Vita – Live Prosperously in the market? And how do you differentiate yours from others?

Unit-linked requires significant investment by insurers, particularly in the area of system, technology, risk management and technical expertise, and so on. Up to date, only a handful of life insurers in Vietnam have offered this product.

Though not being the first unit-linked product launched in the market, we are confident Vita - Live Prosperously (Vita – Song Thinh Vuong) will do well thanks to its comprehensive protection benefits, attractive investment prospects and optimal flexibility.

A key differentiator of Vita – Song Thinh Vuong is the fact that customers are provided with four unit-linked funds which are managed by the two leading investment managers in Vietnam, namely VinaCapital and VietFund Management (VFM, a member of Dragon Capital Group). They also have the flexibility to switch funds, withdraw money, invest additional money (top-up premium), stop paying premium (premium holiday), etc.. In addition to the results from selected unit-linked funds, Generali Vietnam’s customers may also receive Regular Bonus and Special Bonus from Generali.

Why do you work with two fund managers at the same time? How would this help optimise the performance of the unit-linked funds?

Currently, most insurance companies in Vietnam use just their own fund manager (i.e. within the same group) or one fund manager to manage unit-linked funds. We decided to adopt a different approach.

By engaging VinaCapital and VFM, the two leading investment companies with excellent track records both internationally and locally, we hope to draw from their strengths and experience in different fields and aspects to maximise the returns of our unit-linked funds, while also minimising associated risks. We also aim to use this “healthy competition” between the two fund managers to the benefits of our customers.

So why should customers opt for this insurance investment channel rather than other investment vehicles such as bank deposits or gold, real estate, securities, etc.?

There is a saying that one should not put all of their eggs into one basket. Unit-linked funds are not meant to replace other investment vehicles, but serve as an additional investment channel with a number of unique features as follows:

• Unit-linked funds are managed by professional fund managers. This helps customers save time and effort and provides peace of mind to those who have limited knowledge and experience of the financial market.

• Unit-linked offers maximum flexibility for customers in managing their investment to best suit their expectations and risk tolerance.

• Customers don’t need to have a large sum of money to start investing. They can start with an investment as low as VND20-50 million ($870-2,174) per year, then invest more when they can in the future.

• A key advantage of a unit-linked product is protection against insurance risks and this is something a pure investment product does not have.

What kind of investment expectations can your customers have with Vita – Song Thinh Vuong funds?

As Vietnam continues to develop and attracts foreign direct investment, our country’s future prospects are bright and this should bode well for investors, including individual investors like ourselves. It is well proven that investing early on, regularly, continuously and with discipline is the smartest way to invest. Vita – Song Thinh Vuong allows customers to do just that.

However, I would like to emphasise that unit-linked is an insurance product, thus it is not appropriate to compare it against other pure investment products. Customers should evaluate this product based on both its insurance benefits and investment feature and should be prepared to invest in the policy for the long run.