As the stock market booms, investor interest is spreading beyond individual stocks and exchange-traded funds (ETFs) to long-term asset management products. In particular, as the rally in growth stocks centered on AI and semiconductors continues, interest in variable insurance—which combines investment performance with insurance functions—is growing again.
In the past, many people repeatedly signed up for and canceled variable insurance based on short-term returns, due to a lack of understanding of its structure. Recently, a growing number of customers are approaching it as a financial product for long-term investment and asset transfer.
Won Jong-hyeok (pictured), branch manager of Team 3, GA1 Division at Mirae Asset Life Insurance, is an asset management expert who earned an MBA from Sogang University's Graduate School of Business and served as head of the customer support team at Mirae Asset Life Insurance. He explained the variable insurance investment trends and long-term asset management strategies seen in customer consultations.
"Demand Expands From Those in Their 20s and 30s to Retirees and Inheritance Groups"
The customer base seeking variable insurance recently has become more diverse than in the past. Demand is expanding from younger generations with growing interest in investment, to middle-aged people wanting to reduce their tax burden, to the elderly preparing for asset transfer. "In the past, there were cases where people signed up thinking it was no different from ordinary insurance, without much understanding of the characteristics of variable insurance, and then repeatedly canceled in the short term," Won said. "Recently, as financial knowledge has increased, more customers are approaching it with an understanding of the product's structure and its long-term investment purpose."
The recent stock market rally has also influenced the expansion of interest in variable insurance. "As the domestic stock market shows strength driven by the global AI and semiconductor boom, interest in KOSPI ETFs, which had long remained in a trading range, has also increased," Won said. "This investment enthusiasm has led to interest in viewing variable insurance as a long-term asset management tool."
"Interest in Global Funds Such as S&P 500 and Nasdaq Expands"
Variable insurance is a product that combines insurance and investment functions. Like ordinary insurance, it offers protection functions, while investing part of the premium in funds so that the accumulated amount and refunds vary according to management performance. Unlike ordinary funds or ETFs, its distinguishing feature is that policyholders can use fund changes and tax benefits based on the characteristics of an insurance product. "Unlike funds that purely pursue investment performance, variable insurance also has the characteristics of insurance," Won said. "It is a product with high utility for customers who want to build assets over the long term."
Recent variable insurance subscribers are broadening their investment scope by using funds that track global indexes. Cases of actively managing portfolios—such as changing funds and adjusting investment weights according to market conditions—are also increasing. "Starting a few years ago, more customers have been choosing U.S. S&P or Nasdaq index ETFs," Won said. "Recently, the scope of investment interest is broadening to include domestic and overseas semiconductor-related upstream and downstream industries and even the robotics field."
Mirae Asset Life Insurance's "Global MVP Fund" is a global asset allocation fund that adjusts the weighting of assets such as stocks and bonds according to market conditions. It provides a global diversified investment strategy so that variable insurance subscribers can manage their assets while responding to market changes.
"Look at Long-Term Compounding Rather Than Short-Term Volatility"
Variable insurance is a product that should be approached from a long-term investment perspective rather than short-term returns. Although the market repeatedly rises and falls in the short term, it reflects inflation over the long term, so it can be used as an asset that responds to inflation.
"Because variable insurance is ultimately insurance, operating expenses are incurred and not the entire premium is invested," Won said. "You need to fully understand this structure before signing up." He added, "Rather than judging based on short-term market fluctuations, you need the perspective that this is an asset that responds to inflation over the long term. As investment performance accumulates, the difference can grow larger over time through the compounding effect."
However, advice also emerged that since variable insurance is a product whose advantages grow the longer it is maintained, one must first set an investment purpose. "You must first set your purpose—whether to use it as a source for inheritance, to prepare it for pension purposes, or to target refunds," Won said. "Rather than being swayed by every market movement, an approach of steadily growing assets is important."
"Jung Ji-won's Money Trace" is a column that traces the investment trends of high-net-worth individuals through asset management experts in the financial sector. It follows the trace of money—where the wealthy are focusing their attention and how they allocate their assets.
