Traditional life insurance vs VUL

[komodojo]

^ It's called "Freedom at 65 plus 5-pay"

On closer look, may termination date pala itong policy na ito at age 65. Pagdating ng ganung age, ibabalik sakin ay 200k and wala na ako insurance.

Cash benefit payouts (endowment) of 20k beginning on 2019 (8th yr anniversary of policy) and every 2 yrs until 2045 (age 65 ko) provided buhay pa ako and the policy is in force at the time of payouts.

Annual premium ko ay P66,413.64 5 yrs to pay

Other benefits (or riders) include accidental death benefit of 200k and Total Disability Waiver of Premium.

Sa Sun Life, the similar product is called Sun Smarter Life Elite Peso 5

for the same face amt of 200k, same riders and endowment every other year, the annual premium is 82,524.00

The differences are:
* Insurance coverage is double the FA (400k)
* Cash benefit payouts (endowment) is 16,000 starting end of 6th yr and every other yr onwards, for life (yung sa manulife 8th yr pa)
* life insurance coverage until age 100 (sa Manulife sa itaas it terminates at age 65)

Kung nalaman ko itong sa Sun Life ng mas maaga baka ito ang kinuha ko kasi double ang coverage tapos on 6th yr may matatanggap na agad. Tapos insured until age 100 (mas matagal ang duration ng insurance).

The numbers above are for 31-year-old female non-smoker.

Kung alin ang mas maganda is subjective. It depends on the preference of the life to be insured

VUL stands for Variable Universal Life or Variable Unit Linked. Which basically means Insurance + Mutual Funds. Pesos and Sense explains it well: https://www.youtube.com/watch?v=i6HN3Z_DBoo

I have the same insurance policy (but different values/terms) and I'm thinking of pulling it out na lang and place my money in VUL. Iniisip ko kasi there's probably a better one than mine eh.

face amount: 250k
accidental death benefit: 250k
cash benefit: 25k every 2 years starting from the 11th year
premium: 15k annually for 43 years (until 65 years old)

beneficiaries will receive 500k (FA + ACD) if I die. I receive 250k (FA) if I'm still alive by 65 years old.

I started 2009 when I was 22 years old. I hope someone can give me advise @_@

[m_lim]

Term or Traditional Insurance vs. VUL

explanation saken ng advisor ko, mas okay parin ang VUL kahit mas mahal... kasi hindi magbabago yung babayaran mo kahit tumanda ka pa.

unlike sa traditional na mura nga. pero mura lang kapag bata ka pa, as you age, lalaki ang babayaran mo. alangan naman kapag matanda ka na, tsaka mo pa itigil ang insurance mo eh mas kailangan mo na nga.


ano say niyo mga sis?

[mxherr5]

^
m_lim sounds like the FA does not understand the structure of
a VUL that well if that's what he/she is saying.

a VUL is practically a yearly renewable term plus an investment
fund.

Ask your FA what he/she thinks about COI(Cost of Insurance)
charges. It's equivalent to a yearly term insurance.

With VULs, a lower premium does not mean cheaper.
What matters are the premium charges and the COIs.

With other insurance companies, you can even dictate
the premium you want because it doesn't really matter.
They just have a minimum. (mostly 20k-30k a year)

[ikaela]

I have the same insurance policy (but different values/terms) and I'm thinking of pulling it out na lang and place my money in VUL. Iniisip ko kasi there's probably a better one than mine eh.

face amount: 250k
accidental death benefit: 250k
cash benefit: 25k every 2 years starting from the 11th year
premium: 15k annually for 43 years (until 65 years old)

beneficiaries will receive 500k (FA + ACD) if I die. I receive 250k (FA) if I'm still alive by 65 years old.

I started 2009 when I was 22 years old. I hope someone can give me advise @_@

This is a very traditional plan.

P15,000 yearly premium x 43 years = P645,000 total money you will pay

P25,000 x total of 17 payouts (every two years until you are age 65) = P425,000 total endowments you will receive

P425,000 endowments + P250,000 lump sum at age 65 = P675,000

So your P645,000 becomes P675,000 over 43 years. Is the P30,000 gain on a 645k capital enough for you?

Kaso nasimulan mo na and 6 years na rin nabayaran mo eh... sayang naman yung P75,000 mo kung itigil mo at mawawalan ka pa ng insurance. Baka may way na gawing limited to 10 years na lang ang paying period nito? Once you have the insurance/endowment in place, there are many other better ways to grow the 15k you pay annually.

[mxherr5]

To add to my reply regarding VUL


Sunlife's Flexilink VUL has 3 types of charges.
(a) Premium charges which are paid from year 1-10
and (b) Periodic charges which are paid from year 1-5
and finally (c) Monthly Insurance Charges which are
payable for the entire life time of the policy.

I'm not sure if you advisor showed you a proposal with
the "charges" column included but if he/she did then
you'll clearly see that there are still charges even
when you're 65.

For example, I have a 21k VUL with a 1M benefit.

At age 22, I paid 1.5140 pesos per 1,000 insurance
coverage. At 1M insurance coverage, that comes out to 1,514

At age 32, I will have paid 1.8562 per 1,000 insurance
coverage. At 1M insurance coverage, that comes out to 1,856.2

At age 52, I will have paid 4.3033 per 1,000 insurance
coverage. At 1M insurance coverage, that comes out to 4,303.3

At age 72, I will have paid 21.923 per 1,000 insurance
coverage. At 1M insurance coverage, that comes out to 23,063.

At this point, the amount I'm paying for the monthly insurance
charges would have exceeded my annual premium of 21,360.

Note that other VULs have a different structure.
Instead of a periodic charge, they have monthly policy fees
which are also payable for the entire life time of the policy.

[j.adore]

Do you know if there is a term insurance having BOTH accidental riders and critical illness riders in one plan? I noticed that if I want to have all, I have to get a VUL?

[mxherr5]

My term insurance with Manulife has both MAcciMax riders(accident and disability)
and ECI(Enhanced Critical Illness)

[j.adore]

Thanks a lot for all your help I'll check on this as well.

[PetiksPinayInvestor]

Sis,

Merong plan sa Sun Life called Sun Life Assure. It is a term insurance plan packaged with Critical Illness Benefit. If you claim the CIB, then mawawala na rin ang life insurance. So it is either life insurance or CIB. ADB and TDB riders can be attached to it.

Do you know if there is a term insurance having BOTH accidental riders and critical illness riders in one plan? I noticed that if I want to have all, I have to get a VUL?

[D4thAngel]

Term or Traditional Insurance vs. VUL

explanation saken ng advisor ko, mas okay parin ang VUL kahit mas mahal... kasi hindi magbabago yung babayaran mo kahit tumanda ka pa.

unlike sa traditional na mura nga. pero mura lang kapag bata ka pa, as you age, lalaki ang babayaran mo. alangan naman kapag matanda ka na, tsaka mo pa itigil ang insurance mo eh mas kailangan mo na nga.


ano say niyo mga sis?

Sis, to add lang po: Term insurance is purely protection lang. Say, you pay for a 1-yr term,  after a year - expense na sya on your part, walang na-invest sa binayaran mo. eto yung mura lang pero malaki ang coverage.

Traditional is more of a savings, covered ka for a long period, at pag gusto mo I-surrender yung policy mo, may guaranteed cash value ka. Recommended to sa mga conservative investors.

VUL is like a portion is cost of insurance, a portion is being invested. So, yung value ng investment mo will depend dun sa performance ng pinili mong fund, at ang guaranteed lang ay yung death benefit that would depend sa investment mo.

[PetiksPinayInvestor]

^ OK ang VUL kung nagsisimula ka pa lang. Pero dapat grumaduate jan.

Kasi yung projected returns hindi naman guaranteed yun e.

You get a VUL to have a habit of saving or setting aside a budget every month to pay for the premiums (monthly, quarterly, annually)

Ito yung "graduate" part

Ang best talaga is you get a traditional insurance (yung pure insurance) then invest the difference.

Ang pagkuha ng insurance plan ay depende sa income ng isang tao

Is saving 25% of your monthly income hard for you?

How about saving 1%?

What amount between 1% to 25% is affordable for you?

Once you have that amount, Get a traditional insurance, divide the annual premium into 12 so you get the monthly budget

Then subtract that from the % amount na affordable sa iyo

Kunyari,

10% is affordable for you. And 10% = 5,000

Tapos yung annual premium to start a traditional insurance is 10,000 so that's 833.33 lang per month

5,000 - 833.33 = 4,166.67 yan ang iinvest mo.

Gawin mo ito for 25 yrs

Yung premiums mo na babayaran beyond year 25 e kukunin mo sa investment mo. Malaki na yung investment mo kasi 25 yrs ka ba naman nag-iinvest e. Sabihin na nating hindi tumaas ang budget mo per month at 4% per annum lang ang interest rate (conservative). Di ka parin lugi compared sa kung sa bangko mo lang talaga nilagay ang pera mo (with 1% interest per annum tapos may tax pa..)

Dun sa investment part, ikaw ang maghahanap ng pag iinvestan. That means, you learn. You invest in books, seminars, etc.

Ganun talaga. There is nothing free in finance.

So you have in your portfolio, a VUL, a traditional, an investment, etc.

In your lifetime, hindi lang naman iisa ang insurance na hawak mo. Magdadagdag ka pa rin kapag tumataas ang lifestyle mo

I hope this helps or gives you an idea

[ikaela]

^I like that line: "OK ang VUL kung nagsisimula ka pa lang. Pero dapat grumaduate jan." I fully agree -- you can't go your entire life leaving it to other people to secure your future. If there's anyone to take care of your old self, it should be your younger self.

As for what D4thAngel quoted from m_lim:

explanation saken ng advisor ko, mas okay parin ang VUL kahit mas mahal... kasi hindi magbabago yung babayaran mo kahit tumanda ka pa.

unlike sa traditional na mura nga. pero mura lang kapag bata ka pa, as you age, lalaki ang babayaran mo. alangan naman kapag matanda ka na, tsaka mo pa itigil ang insurance mo eh mas kailangan mo na nga.

mxherr5 just debunked this about 7 posts ago. What you pay for insurance in a VUL still does go up as you age, just like in a term insurance. The payment is just automatically taken out of your investment, that's why you won't feel it. In it's very essence, a VUL is term insurance + investment anyway, just like Buy Term Invest the Difference (BTID).

[msals2007]

An agent called me service provider daw ng Citibank offering me an insurance forgot the name. Pero tied up with Manulife. Do you think this is a good offer.  Monthly for 10 years is 1500+ or about 18k per annum. 10 years din ang coverage 3M. After 10 years, 50% money back plus all the dividends earned. Paano ba malalaman ang dividends earned? Sabi niya most conservative projection ng Manulife is 3%. Di ko masyadong nausisa pinatawag ko next week may client kasi ako nung tumawag.

[j.adore]

After months of studying (at busy din kasi hehe), final decision is to get term insurance and we'll go for BTID.

GT helped a lot so I wanted to thank those who have been sharing their knowledge and experiences here 😊

[kobekitten]

^ where have you decided to buy term insurance? and to invest? if you don't mind 

[j.adore]

Sun and Philam then MF>UITF>stocks in that order

[happy_am]

sa TRAD Life insurance cheap sya compared sa VUL.

TRAD: mag expire sya every 5yrs or 10yrs and mag renew ka uli.
          what if nag expire sya and that time gipit, or nalimutan mag renew?

          mas bata mas cheaper, pag nagka edad mahal na.
         
          everytime na mag renew ka... yung binayad mo masasayang.


VUL:   5yrs or 10yrs covered kana until age 100
          Yung binayad ng client mag accumulate ng Cash Value.
          Yung premium from yr 1 until yr 10 -- NO Premium Increase.


         

[j.adore]

Like the spiel of an agent selling VUL

[fionaapple]

Sun and Philam then MF>UITF>stocks in that order

anong name ng term insurance product ang inavail mo sa Sunlife and Philam?

[j.adore]

Assure and Guardian 65