Savings & Investment: Which Is Better? | Singlife Philippines

Most of us are taught the advantages of saving money from a young age, but is just saving money enough? As you grow older, you’ll have larger financial decisions to consider, like buying a house or a car. While the returns of investing are higher than leaving your money in a savings account, it’s also riskier. This is why people often hesitate to start investing. Depending on your short and long term goals, here’s how to save and invest money wisely.

Saving vs. Investing

Saving means to put your money aside in a relatively risk-free bank account. This is money in savings accounts that can be accessed easily when needed. People often save up for a future expense or a need.

Investing, on the other hand, involves using your money to buy an asset that will generate higher returns, but with more risks involved. Some forms of investments include stocks, mutual funds, real estate, shares and more. Most people who invest do so in order to grow their money and achieve long-term financial goals.

Deciding between saving and investing

Both saving and investment have their own benefits. Most people often start off with saving first, as a safety net, in the case of unexpected expenses or loss of income. Your savings or “emergency fund” should cover at least 3 to 6 months of your expenses to avoid the stress of financial troubles. The general rule is to save a minimum of 10% of your salary or as much as you can afford in order to achieve financial security.

Once you’re financially stable and have a comfortable amount of money saved up in your bank account, you can consider investing. Before putting your money into an investment, it’s important to consider your financial goals. Oftentimes, your funds have to remain in an investment plan for 3-5 years, depending on the type of investment you choose.

The advantage of investments is that it generates higher returns compared to leaving your money in a bank account. With inflation, sometimes just putting money aside is not enough. However, it’s important to note that there are higher risks involved when it comes to investing and you may end up losing money if you’re not careful. The higher the returns, the higher the risks involved. Hence, this is why you should only invest money that you may not need in the foreseeable future.

So, which is better?

A combination of saving and investing works best. First, work towards securing a healthy amount of savings in your bank account. Then, start investing to give your money more opportunities to grow. At the end of the day, how much money you decide to put into your savings or investment will depend on your goals and risk tolerance.

When it comes to financial management, you can count on Singlife. At Singlife, we embrace technology to help Filipinos be confident and in control of their finances. From 2021 onwards, Singlife will include products that cater to both saving and investing. Learn more about our available products now.

Singlife Plan & Protect is the first and only mobile app that guides you to SAVE for emergencies, PLAN your financial goals and PROTECT them with life insurance and savings solutions.

No matter how much you earn or save, there will still be times when your income or savings are not enough. Having life insurance in place ensures that you have the money you need when you need it most.

When you are insured, you have a guaranteed source of money to cushion the blow of an expensive medical bill or a sudden loss of income. You can also use it to kick off your investing journey, helping build up the funds for future needs such as education for your children and retirement. Simply put, life insurance makes all the difference when things do not go as planned.

Knowing how beneficial life insurance can be, it is troubling to know that majority of the insurable population in the Philippines still miss the benefits that come with being financially protected.

Research revealed that while many understand the value of life insurance, they remain uninsured because traditional products are complicated, expensive, and require too long of a commitment.

“Financial advisors – commission-based agents or bank staff - usually push for hefty premiums and long commitments to maximize their income. Client, however, are after solutions that fit their financial needs, can be adjusted whenever their needs or preferences change, and have the least impact on their budget.”

“People in the middle-class segment experience this conflict the most. They shy away from conversations with agents because they fear that they will end up getting an expensive product that ties them down for many years without really delivering on what they need. The agents’ sales talk might have convinced them to buy, not knowing fully what they signed up for. This often results in contracts being pre-terminated, leaving customers at a loss.”

Singlife Philippines recognizes this conflict and uses the smartest technologies to offer products that are meaningful and easy to understand, giving you and your family the right amount of coverage at the best possible price. These products include tools that help you understand your financial needs and manage your finances better. They can be adjusted or stopped at any time with zero cost, knowing financial situations can change in a snap. All of these can be accessed and managed anytime, anywhere using only your mobile phone. With Singlife, you know you are always in control.

“It’s alarming that life insurance only has single-digit penetration in the country when there are millions who can benefit greatly from it,” said Rex Mendoza, Chairman of the Board of Singlife Philippines. “Indeed, there has been an increase over the years, but we also know that a significant percentage of those who do have life insurance now do not have sufficient coverage.”

Both Rien and Rex have served as CEOs in life insurance companies that ranked in the top 3 of the local market. They have witnessed how financial services evolved through the years. More importantly, they have seen the gaps that still need to be filled to ensure a better financial future for every Juan.

“By redesigning protection products using modern-day technologies, we make it possible for more people to take control of how they save and get protected,” added Rien. “Our use of these technologies also ensures that our customers get the same seamless, end-to-end digital experience that they are used to with other digital services.”

Singlife was born out of the belief that the world needed a different kind of life insurer – one designed with the customer in mind. A belief that started in the region’s center of progress, Singapore. This belief soon made its way to the Philippines, where life insurance has single-digit penetration. Singlife Philippines uses the smartest technologies to make life insurance totally mobile-first, with automated efficiencies to fit customers’ needs, budget, and desire for financial protection to be always on hand.

Singlife Philippines did not apply a one-size-fits-all approach to building its system, knowing customer demands for life insurance continue to change at the speed of digital. Instead, the company leveraged on single-function modules that work in unison to automatically plan for scale, sustainability, and avoid potential failues. Every time a modification is needed to improve value delivery, backend operations remain stable so customers can continue to manage their finances without delay.

“Most insurance companies are still running on core systems that were developed in the eighties,” said Rien Hermans, CEO of Singlife Philippines. “While small developments have happened – like customer portals and mobile apps that allow customers to be updated – they always struggle with having these old core systems.”

The advantage Singlife Philippines has in terms of its technology stack allows it to streamline processes, resources, and costs, freeing up value that is given back to customers. By offering tools and solutions that are digital to the core, customers are given the opportunity to manage their finances the way they have always wanted.

A long-standing debate in the market

There is a huge gap between the insured and uninsured population in the Philippines. The latter is composed of mainly middle-income families who are left in the dark on how to protect themselves because majority of life insurance products are designed for the higher income segments. Either that, or the benefits are too limited which is usually the case with microinsurance.

The hardworking parents, office workers, small business owners, and young professionals live relatively comfortable lives. However, they are not immune to the possibility of experiencing great financial distress: whether due to an expensive medical bill, or to loss of income caused by an accident or death of a breadwinner.

Data show that most people have only one month worth of savings for emergencies, which is likely not enough to pay off bills and sustain daily needs long till they are able to recover from the incident. When finances continue to be a struggle, they turn to loans with high interest rates that bury them deeper in debts.

They know they need life insurance, but they simply do not have it because high premiums, long-term obligations, and unclear benefits from mixing possibilities with guarantees make them reluctant.

Resolving the conflict with mobile-first solutions

Singlife Philippines understands that customers look for protection products that fit their needs, their budget, and are always on hand. For that reason, the company has invested heavily in technology instead of building a salesforce composed of commission-based agents.

said Rien Hermans, CEO of Singlife Philippines. “Their demand for clear and flexible products, 24/7 access and support, and guidance in achieving financial goals can all be achieved with the use of advanced technologies.”

Singlife Philippines will offer 2 mobile-first solutions to the middle-class market. The first comes in the form of protection products via existing digital networks, starting with the country’s biggest e-wallet provider GCash. The partnership kicked off with the launch of Cash for Dengue Costs with a free COVID-19 cover as an introductory offer.

Cash for Dengue Costs was well-received by GCash’s massive customer base, leading Singlife Philippines to insure more than 10,000 lives in less than 2 months after going live with the product.

Also available on GCash is Cash for Income Loss (Accidents). It safeguards customers and their loved ones from great financial distress due to accidents that can cause a person, especially a breadwinner, to become physically incapable of earning a monthly income.

The second mobile-first solution in Singlife Philippines’ business pipeline is a direct-to-customer initiative based on the successful Singlife Account that was introduced to the Singapore market in 2019. It is a mobile app that guides and rewards customers to take control of their financial lives, slated for release in the second half of 2021.

2021 is a big year for Singlife Philippines as it moves from promise to proof of unlocking the potential of money for everyone. Steadfast in its belief that protection for one’s now and future should be available to all, the company will continue to innovate on all fronts to achieve 3 key points in its strategic agenda.

(1) Offering a full suite of no-fuss protection products on GCash

Set for release within the year are upgraded versions of Singlife Philippines’ protection products currently available in GInsure on the GCash app.

Cash for Income Loss is the hero product in Singlife Philippines’ income protection line-up. It replaces up to 100% of your monthly income for 36 months – 38 months including the 2 months bonus – if you get disabled or pass away due to accidents or illnesses.

The total benefit is still paid monthly instead of yearly to ensure a steady flow of income for daily needs. This arrangement also makes it possible for you or your loved ones to stay on track of financial goals despite the loss. Each plan can be tailored to fit one’s lifestyle, budget, and needs to to provide the best possible price for the right amount of coverage.

Cash for Medical Costs provides coverage for medical bills due to hospitalization and critical illness for around PHP 500 per month. Its multi-level benefit includes:

Both Cash for Income Loss and Cash for Medical Costs will have the same fuss-free features as their entry counterparts, which means customers will be able to buy, manage their policies, file claims, and secure payouts without having to leave the GCash app.

Then there is Cash for Later to help customers kick off their investing journey, helping build up the funds for their future needs such as education for children and even a comfortable retirement in an easy, uncomplicated manner.

The completion of Singlife Philippines’ full suite of protection products in GInsure offers customers a smart way of protecting themselves, by giving them control over how they build or strengthen their financial armor without having to worry about expensive premiums, long obligations, and other considerations that hinder them from being financially secured.

(2) Engaging new digital network partners

Singlife Philippines’ propositions are relevant to the 16 million financial decision-makers in the rising middle-class. By working with more partners, the company can reach millions of people who want to secure their finances from unforeseen medical costs and sudden income loss.

said Rien Hermans, CEO of Singlife Philippines. “Ideally, there should be a significant overlap between our target market and their customer base. Further, it is essential that the partner believes in what we believe in – putting customers in control of their finances through technology, offering meaningful benefits at a fair price, and delivering an exemplary customer experience every single time.”

The company is actively engaged in various stages of discussions with potential partners, so customers can look forward to availing protection products that are big on coverage and easy on the wallet from other digital platforms they are already familiar with, very soon

(3) Introducing a specialized approach to savings and protection

The line between financial services further blurs as customer expectations continue to change due to knowledge of and access to digital technologies. Instead of having several accounts with various financial services companies, customers would now prefer to engage with only 1 or 2 that can meet most, if not all, of their financial needs in the best possible way.

Enter Singlife Philippines and its direct-to-customer initiative, the Singlife Plan & Protect app.

The Singlife Plan & Protect app enables customers to build a better, smarter emergency fund that can be withdrawn at any time using a nifty Singlife Card. It also empowers customers to save up money for big funding goals in a dynamic way, adjusting as needed without having to wait or pay for additional cost.

At the same time, customers can seamlessly put in place mitigation plans in the form of protection tools, so expected and unexpected events do not derail them from achieving targets. As they take more control over the finances, Singlife Philippines rewards them with higher interest rates to help grow their emergency fund with.

The Singlife Smart Investment Fund is a pool of funds managed by the fund manager, ATRAM. This Fund aims to generate positive returns by actively managing the allocation of each fund depending on their performance. The allocation of each fund can range from 0% to 100%, as long as the total allocation is 100%. The fund manager also has the option to use alternate funds not in the pool up to a maximum allocation of 10%.

	Security	Type	%Held
1	ATRAM Total Return Peso Bond Fund	UITF	56.27%
2	ATRAM Corp Bond Fund	Mutual Fund	26.57%
3	ATRAM Phil Equity Smart Index Fund	UITF	15.45%
4	Cash in Bank	Cash	1.70%

A Peso-denominated Investment-linked fund managed by Metrobank for Singlife Philippines, which aims to provide long term capital growth by investing in a diversified portfolio of US Dollar denominated equities and equity funds. The fund allows customers to use Philippine Pesos to invest in global major and emerging markets that have the potential to gain above market returns over the long term.

	Security	Type	%Held
1	MSCI World Index	Equity Fund	32.32%
2	MSCI ACWI Index	Equity Fund	25.64%
3	Time Deposit	Time Deposit	15.01%
4	Credit Suisse Security Equity	Equity Fund	10.08%
5	Robeco Global Consumer Trends	Equity Fund	9.33%
6	Franklin Technology Fund	Equity Fund	6.03%
7	Cash in Bank	Cash	1.59%

This is an income paying fund that provides monthly cash payouts. It is a Peso-denominated investment-linked fund that seeks to achieve income and long-term capital growth by investing in a collective investment scheme that invests primarily in a global portfolio of income generating debt and equities.

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