Variable Universal Life (VUL) insurance is currently the leading life insurance product in the Philippines today. This life insurance product is attractive to the public because it has an investment feature. Many Filipinos today are continuously looking for ways to grow their money. Hence, the popularity of VUL.
My wife and I availed this type of life insurance product in our early 20s to serve as financial protection for our family when any of us die and to serve as savings and investment for our retirement, child’s education and future expenses.
It is a financial protector in the sense that when I die, the life insurance company will provide money to my family to replace my income that would be lost the moment I die. That’s the importance of life insurance, protecting my family from financial disasters brought about by my death as bread winner. This is the income protection benefit of VUL insurance. No kids will go hungry when a parent die.
A portion of my payment (also called premium) will be invested into a pooled fund (similar to mutual fund) and will be managed by top notch fund/investment managers. One example is an equity fund which invest primarily in publicly listed local stocks. The goal of the fund is to make my money grow over time so that I will have something to use for retirement, child education and other future financial needs. All I have to do is to regularly pay my premium, add more money into it and watch my investment grow over time.
With Regular Pay VUL, you don’t need to die to make your family enjoy the proceeds of your life insurance because you and your family can enjoy it while you are still alive. You can enjoy the investment component of this insurance while you are still alive through partial withdrawal.
For example, you can withdraw from your investment fund if you need it. You want to use it to fund your dream travel? Well, you have the freedom to do it. You waited so long for your investment to grow so you deserve to enjoy it in whatever responsible way you want.
You may have heard from other people that life insurance is all about dying; well they are so wrong, it is also about living — you live to enjoy your investment while being able to protect your family through life insurance.
For Retirement Needs
Regular Pay VUL insurance is good financial tool for retirement. Think about this: out of 100 Filipinos who retire, 45 still depend on their relatives, 30 count on charity, while 22 can’t stop working in order to support themselves.
Do you want to be counted with this 97% of the retiree population who did not properly plan their retirement? Or do you want to be among the other 3% who did their retirement planning the right way?
With Regular Pay VUL, you are required to save in a minimum of 10 years to build a retirement fund that will give you comfortable and decent retirement life in the future. You can extend your payment for more than 10 years to help you accumulate wealth for your dream retirement.
You don’t want to be a pasanin for your children or relatives when you are old already, right? So as early as now, plan your retirement. You may say that you have SSS/GSIS already and you don’t need another retirement plan. Well, ask a Filipino SSS retiree now how much she’s getting and if it is enough to cover monthly expenses. You will know the instant answer!
For College Funding Needs
If you paid 20,000 pesos per semester when you were in college, don’t expect that your new born child will have the same tuition fee 18 years from now.
You will be paying ten times this amount 18 years from now because every year colleges and universities increase their tuition and miscellaneous fees to as high as 15%.
Invest now for your kids’ college education to prepare yourselves as parents with the rising cost of education in the Philippines. The good thing about Regular Pay VUL insurance is that if you die, the company will give lump sum amount to your family which could be used to finance the education of your children.
Sample Proposal: Regular Pay VUL with Premium Holiday after 10 Years
(Premium holiday means stop payment after a number of years)
For a 24 year old, Male, Non-smoker.
Face Amount: 1 Million Pesos – This is the monetary value in which benefits are based on.
My beneficiaries will receive guaranteed 1 Million pesos (100% of Face Amount) from the life insurance company after I die even if I already paid the first payment. This money is the death benefit.
This death benefit will make sure that my kids will not go hungry and will still go to school after my demise. My will also have a smooth adjustment period without the financial worries.
Death through accident, murder or natural causes is payable in this life insurance plan. I just wish that my family will use this money wisely because I will not be in the world to remind them the right way to manage money. I must teach my family personal finance while I am alive.
Accidental Death Benefit (ADB) Rider: 1 Million Pesos
If I die due to accident, my family will receive additional 1 Million pesos (100% of face amount) in addition to the 1 Million basic death benefit for a total of 2 Million guaranteed death benefit if I die due to accident.
This benefit is called a rider, which can be added to the basic plan. Although this rider is optional, I added it because I know I need it and it maximizes the basic plan as it is very affordable. Getting this benefit by having another accidental life insurance policy will be more expensive.
Accidental Death, Dismemberment and Disablement Benefit (ADDD) Rider: 1 Million Pesos
This rider has the Accidental Death Benefit mentioned above but with Dismemberment and Disablement benefits. Death due to accident is payable with 1 Million Pesos.
Dismemberment or loss of body parts due to accident is payable with up to 1 Million pesos depending on body parts lost. For example, if I get blind due to accident, I will receive 100% of the face amount or 1 Million pesos.
If I become totally and permanently disabled, the life insurance company will give me up to 1 Million pesos disablement benefit to be given in 10 years — that is 100,000 pesos per year for 10 years.
Total Disability Benefit (TDB) Rider
This rider will waive my payments to the life insurance company if I become totally and permanently disabled due to sickness or accident.
If I am disabled, I cannot work already and may not earn money so this rider will protect me from not being able to pay my premium due to total disability.
Although this rider is again optional, I added it because I believe it is very important. Actually, I consider this a MUST have rider for every life insurance policy.
Critical Illness Benefit (CIB) Rider: 500,000
This rider will provide lump sum amount (500K) if I will be diagnosed and treated with any of the total of 36 illnesses listed in the policy contract. Among the critical illnesses covered are stroke, heart attack, invasive cancer, paralysis, total blindness and kidney failure.
This critical illness benefit rider is optional and the premium increases every 5 years. I highly recommend this benefit even if you are young or your family has no history of illnesses.
Hospital Income Benefit (HIB) Rider
Another rider I can attach to the VUL policy is the Hospital Income Benefit (HIB) rider which gives me daily income when hospitalized. If I availed this rider, I can get up to 1000 pesos a day when hospitalized for a maximum of 1000 days. That is 1 Million pesos hospitalization income.
It is just like a replacement of my daily salary when I get confined. The amount will be doubled to 2000/day if I will be confined in the ICU or be hospitalized due to acute heart attack, chronic liver disease, dissecting aortic aneurysm, end stage lung disease, end stage renal disease, invasive cancer, major organ transplant, multiple sclerosis, poliomyelitis, progressive muscular atrophy and stroke.
Depending on your salary, you can get higher HIB. For example, 5000 pesos per day.
Part of my payment will be used to pay insurance charges or the cost of insurance and part of it will be invested in an investment fund of my choice. I can choose from equity fund, index fund, balanced fund, bond fund or money market fund. I personally chose equity fund because I want my money to be invested in locally listed (to the PSE) companies. Investing in the equity fund involves risk but gives higher potential return. If I retire at age 60, here are the projected fund value which I can withdraw to use as retirement fund:
At 8% Annual Fund Earning: 799,067 pesos
At 10% Annual Fund Earning: 2.476 Million pesos
These fund values are not fixed and not guaranteed as they depend on the actual performance of the fund you choose. They are just projections to give each policy holder an idea of how his/her money can potentially grow through the years.
For 10 years, I will pay 28,300 Pesos per year, a total of 283,000 Pesos. It is about 78 Pesos a day or 2,358 Pesos a month. I will consider my VUL insurance plan as additional regular savings plan but unlike my bank saving, it has bigger potential to grow over time. On top if this regular premium, I can also add more money (top up) into it that will be directly invested in my chosen investment fund.
If you are a young professional, the best time to get a regular pay VUL plan is now! Because if you are young, your insurance premium is lower compared to older people.
Also, because you are still young, there is longer time for your investment to grow in value over time. Thirty to 40 years to retirement is such a long time for your investment to grow. If you are 40 something or 50 something, it is still not too late, you can still avail this plan. It is not too late to protect your family and build your retirement fund.
Ang ganda ng VUL insurance di ba? Request a customized proposal for you. You can also text/call me at 09179698062 (Phone/Viber) or email me at firstname.lastname@example.org.
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The proposal I am going to send you has many technicalities and jargons that a regular person would not understand without a licensed advisor explaining it so I strongly suggest that after you read the proposal, schedule an appointment with me to discuss it.
When you set an appointment with me, you have NO obligation or commitment to buy from our company. If you don’t like it, it is perfectly okey. The appointment is free and fun. I am available most of the time 24/7. You want a 3am meeting? No problem with me! Whether you are working in the morning shift, middle shift or night shift, I will find time for you.
The meeting will usually take 1 hour or less, or longer if you want to learn more or if you have questions. Since I am a full time financial advisor, I could adjust my schedule based on your location and working hours. I make it easy for you. I serve clients in the following areas: Metro Manila, Rizal, Laguna, Batangas, Bulacan, Pampanga, Tarlac, Pangasinan, La union and Ilocos Sur. Clients not located in these places will be referred to licensed advisors near them.
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