Traditional life insurance vs VUL

[snowyice]

What is the difference of Traditional life insurance from VUL?  These are the things that I know

Traditional life insurance - covered by IC
                                    - lapses if premium will not be paid on time.
                                    - covers until 99 years old
                                    - has lower dividends compared to VUL
                                    - higher premiums

VUL - flexible investments
       - higher dividends
       - lower premiums
       - can pay for the premium as long as it has dividends
       
Any inputs would be appreciated.  TIA!

[blooming]

^good quesiton sis. puzzled din ako dyan hehe


ang pagkakaalam ko (hindi ko din sure)

- ang VUL is an investment, inattach lang ang insurance sa kanya para maging tax free. VUL is like a mutual fund hindi ba?

- ang life insurance, ang alam ko can also pay for itself at some point kung malaki na naipon and yung dividends can just be used to pay off the premium. 

- ang VUL does not necessarily translate to higher dividends. depends sa galaw ng NAVPs nya.  May time bumababa din sya, in those cases, lugi ka.

- on VUL having lower premiums, am not really too sure.  try reviewing yung coverage nya and insured amount vs the traditional life insurance, parang mas mahal eh.

[snowyice]

medyo nahihilo nga ako eh kaya gusto ko sana ng konting tips dito sa mga sis natin 

[betty]

vul kase ang uso at pwede na monthly lang bayad.

sis tax free para sa mga beneficiary pag vul? so pag traditional hinde? how about sa term life?

[blooming]

^ sis, kahit traditional insurance, ang alam ko, puede din monthly ang payment.  pag VUL, puede din annual, puede din one-time.  I did one-time lang.

Lahat ata ng insurance tax free.  Kaso sa VUL it is like an investment din, so hindi ka nagbabayad ng 20% tax on the interest you are earning. Pero teka, di ba traditional life insurance, ganun din?  haha, parang nilito ko lang kayo.


Pag term naman - hindi sya investment at all. Expensed out lang ang premium na binayad mo.

[health.gal]

Traditional life insurance - covered by IC
                                    - lapses if premium will not be paid on time.
                                    - covers until 99 years old
                                    - has lower dividends compared to VUL
                                    - higher premiums

VUL - flexible investments
       - higher dividends
       - lower premiums
       - can pay for the premium as long as it has dividends

based on what i know:
IC - both are insurance products, so I suppose that both are covered by the insurance commission
dividends - are earnings of the insurance company na pinaghahatian ng mga policy holders. same lang ang dividends sa  VUL and traditional.
premiums - are payments that policy owners give to keep them insured / covered. ang pagkakaalam ko, mas mataas ang binabayaran ng policy holder sa VUL compared sa traditional, kasi ang VUL ay isang traditional policy PLUS investment. naku po, kung may taga Sunlife dito, please confirm this.

VUL:
- failure to pay premiums on time (more than the allowed extension) will NOT make your policy lapse at once - for as long as you still have enough Fund Value which may be used to pay for the premium
- you may add premium payments which are called top-ups - ito po yung ginagawa kung gusto ninyo bumili ng additional units sa investment part
- death benefit (yung makukuha ng beneficiaries in case the policy holder passes away) includes the face amount, or yung coverage na tinatawag, which is fixed plus the dividends, plus the fund value or kung magkano yung current worth ng units na nabili ng policy holder
- you may withdraw your fund value anytime (pero may minimum amount ata)

Traditional:
- failure to pay premiums on time (more than the allowed extension) will make your policy lapse
- fixed premiums
- death benefit (yung makukuha ng beneficiaries in case the policy holder passes away) includes the face amount, or yung coverage na tinatawag, which is fixed plus the dividends
- since wala itong fund value, wala ka rin mawiwithdraw, yun nga lang, sa ibang insurance companies pwede mo ata i-loan ang certain amount of premiums that you've paid

**Yes, ang VUL pwedeng one-time payment or single pay. Ang maganda sa single pay, wala ka nang isipin na babayarin. Ang pangit naman dito, kailangan mong tiyempuhan ang market. Dapat itaon mo na mababa ang prices ng stocks and bonds by the time na kukuha ka, para mas marami kang units na mabili.
**Term insurance - insurance for a specific period, usually a year. Pag buhay pa rin ang policy holder after a year, then may option siya to continue the policy, or itigil na. this is best for young and budgeted people. I remembered yung illustration sa akin ng agent ko, para daw sa bahay, pag bagong kasal at wala pang pera, advisable na magrent muna ng apartment at ilaan ang ibang pera sa pagkakakitaan para lumago, then pag may sapat na pera na, then saka bumili ng bahay. Ganun din sa insurance, pag bata pa at hindi pa masyadong malaki yung kinikita, term insurance muna kunin, then pag kaya na, saka kumuha ng life insurance. Not everyone may agree, but it makes sense.

[betty]

blooming, sabi kase ng agent na kausap ko eh hindi pwede monthly ang traditional since its purely insurance unlike VUL na part of what your paying for goes to investment

[health.gal]

^ganun din ang alam ko, hindi pwede ang monthly pag sa traditional. pero may mga agents na para hindi mahirapan ang clients nila eh inaaccept nila ang monthly payments as advance payments, tapos hahawakan lang nila ang pera, pero bawal yun. sa vul actually quarterly rin ang alam ko na regular payment schedule not unless top-up gagawin.

[betty]

sa prulife pwede monthly.. i think sunlife too.

atsaka sa vul hindi loan pag kumua ka ng pera.

[health.gal]

^ang alam ko quarterly ang shortest mode of payment sa sunlife and philam (not unless may bago silang rules)

[snowyice]

^^traditional and VUL both accepts monthly payment and it applies to all company the difference is kapag traditional may interest if you opt a payment scheme other than annual, sa VUL walang interest 

[health.gal]

^are you sure sis? both my philam and sunlife agents said that the shortest mode of payment is quarterly...can i quote you on them?

[snowyice]

^^meron talagang monthly kaya lang ayaw ng mga agents kasi high risk mas malaki ang chance na maglapse.   

[health.gal]

^ah okei sis, thanks for the info. maiclarify nga rin sa kanila.

[snowyice]

^^call the number of the company directly and ask the customer service.  They will not lie.    I will scoop around din 

[blooming]

premiums - are payments that policy owners give to keep them insured / covered. ang pagkakaalam ko, mas mataas ang binabayaran ng policy holder sa VUL compared sa traditional, kasi ang VUL ay isang traditional policy PLUS investment. naku po, kung may taga Sunlife dito, please confirm this.

Meron din kasi akong Sunlife na nakuha na "endowment".  So I guess it is an insurance policy na investment narin. 

Traditional:
- since wala itong fund value, wala ka rin mawiwithdraw, yun nga lang, sa ibang insurance companies pwede mo ata i-loan ang certain amount of premiums that you've paid

Sis, mukhang nag evolve nanga itong product na ito, kasi meron na rin silang "withdrawable amounts" at certain points in time. option mo to withdraw or not, but you cannot withdraw entirely.  parang mga add-ons lang kasi siguro to make the policy more attractive.
Pero you are right, di mo puede i-withdraw ng buo until magmature na talaga sya, which usually lasts 20-30 years, matagal.

As for the VUL, meron din syang holding period.  or depende?  I have Philam kasi, parang 5 years ata holding period, bago mo puede i-withdraw. Just not sure with Sunlife.

Sana may taga Sunlife/Philam na mag explain nito.

[snowyice]

I have called Philam kanina hawak naman daw ng Insurance commission yung insurance kaya nga insurance eh oo nga naman!  bakit ko ba hindi naisip agad yun... but the difference between VUL and traditional life is ....kapag bumagsak ang market tapos puro nasa investment ang pera mo sa VUL talo ka pero insured ka pa din. But sa traditional life kahit bagsak ang market kapag schedule to withdraw they still need to give you the money. Both products has their own advantage and disadvantage nasa atin na lang kung ano ang bibilhin natin 

[betty]

kung nakasalalay sa investment ang ating premium, kase after certain years 100% of what we pay for goes to investment fund na, pano pagnalugi? which part decreases?
i dont know with sunlife but with prulife 2 kasi ang composition ng assured amount, the basic cover and the term cover.
mas mataas ang value ng term cover kesa basic but the total amount is the sum assured.

[snowyice]

^investment

[blooming]

I have called Philam kanina hawak naman daw ng Insurance commission yung insurance kaya nga insurance eh oo nga naman!  bakit ko ba hindi naisip agad yun... but the difference between VUL and traditional life is ....kapag bumagsak ang market tapos puro nasa investment ang pera mo sa VUL talo ka pero insured ka pa din. But sa traditional life kahit bagsak ang market kapag schedule to withdraw they still need to give you the money. Both products has their own advantage and disadvantage nasa atin na lang kung ano ang bibilhin natin 

so yun nga kung bumagsak ang NAVPs. Pero in good times, mas bawi naman VUL.  Baka ito lang nga ang difference, mas risky ang VUL product kasi mas puede ka magka gains or malugi. 

may time nga na mas maliit ang value ng VUL ko kesa sa ininvest kong amount.  pero iniwan ko lang naman sya, ngayon ok na, pero nababaan parin ako sa returns. but compared to insurance, mas ok din. kaso compared to other investments like bonds ROPS and timedeps, parang mas ok yung timedeps and bonds.