Single Pay VUL VS. Mutual Fund .., Which is better?

I have 1 million pesos and want to invest it one time, Is Single Pay VUL a good option?

Advantage # 1

Well, investing in Single Pay gives you the advantage by getting a 25% free life insurance coverage  based on your investment.  How does it work? In this case, investment is 1 Million, if something happens to the insured, beneficiaries get additional  250,000.00 pesos or a total of 1.25 Million. But if the fund value is higher than 1.25M pesos, let’s say it became 1.5M pesos because of market performance they get whichever is higher.

Same as MF  in VUL, investors can choose  either  Equity, Balanced or Bonds

Advantage #2

Another advantage for this financial product is that there is “capital protection.” For example your 1.0 million pesos investment went down to 800,000.00 pesos because of market volatility if something happens to the insured beneficiary gets 1.25M pesos.

But in Mutual Funds if  1,000,000.00 pesos investment  went to 800,000.00 pesos and something happens , he gets 800,000.00 less estate tax. Money won’t be released unless all assets subject to estate tax are settled.  

Advantage #3

If something happens to the owner/ insured,  beneficiary/ies can get the money easily but will be subjected to estate tax if the assigned beneficiary is revocable. . Unlike in Mutual Funds  - you cannot get the money unless estate tax are duly  settled.

On the other hand investment ( VUL) shall not be subjected to estate tax if it is stated the beneficiaries  are irrevocable.


Disadvantage

There is a minimum amount required to invest in Single Pay VUL, unlike in MF you can start as low as 5,000.00 pesos.

Kindly see Estate Tax table below to give you an idea about the charges:

Sample:

Actual Client - Invested in Single Pay VUL - Equity
Investment -                     Php 500,00.00      - Sept 2011
Actual Fund Value  -       Php 851,000.00    as of Sept 9,2014
Gain -                                        351,000.00  or 70.0%
average return per annum -    23.4 %  

Note:  Depends on Single Pay VUL Plan and insurance company, it can be subjected to contestability and holding period and administrative charges