Salary bonuses are definitely something to look forward too, whether it's a mid-year or a Christmas windfall. While it can be quite tempting to spend it on things that you've always wanted (and you should, as long as you budget your expenses properly), it's also smart to set aside a certain amount and actually start investing in yourself.
Life insurance and VULs
A personal observation—people are open to having properties like cars and lands insured, but not every one finds value in insuring themselves. Life insurance, for example, is not considered a priority and is often put off for other expenses. One possible reason is that you can't really enjoy the cash you set aside, as life insurance by definition secures the money put in until your benificiary claims it after your death. Another reason is that it can be a bit costly, but the truth is that it gets even more expensive when you decide to get it later in life, since, morbid as it sounds, the risk of death is higher.
The good news is that these days, life insurance isn't just about money your loved ones will get after you pass away. Most already have "health riders," which offer financial coverage for certain diseases. And while there are term life insurance policies that only cover you for a certain amount of time unless you renew, there are also investment-insurance policies or variable universal life insurance policies (VULs), which invest what you put in different accounts, such as stocks and bonds while offering you coverage.
The thing about VULs, however, is that it's permanent life insurance, which you'll have to pay until either you choose to pull out or you pass away. The upside is that since it's also an investment vehicle, you can take out the money you grew at any point while still continuing to invest in your policy. The downside is that your earnings are dictated by market movement, and may still suffer from losses.
FN Tip: Many experts say that getting a term life insurance policy and investing your money somewhere else that offers better returns is a cheaper and smarter way to go. You can always go DIY on your investment-insurance plan, but if you don't have time to do so, VULs are a more expensive, but less time consuming option. It all really depends on you.
Look for a flexible insurance policy
Different insurance policies have different offerings and restrictions: some don't offer health riders, while some do. Some allow you to pull out money at any time without penalty, some require a lock-out for a certain number of years.
The policy/investment you should get should really be based on your income and your lifestyle, but as much as possible, you'll want to have something that's flexible and will keep you from suffering from loses should the market suddenly dip.
Another kind of financial solution
Recently, Manulife Insurance launched My Vision Plan (MVP) which does its best to put all common fears with regard to insurance-investment plans to rest. If this is your first time to look into life plans, then this is a good way to go.
Manulife Insurance's MVP offers these guarantees:
1. Cash benefits on top of your investments
2. Lifetime protection
3. Easy application
4. Money growth
5. Paying periods
You're never really sure how the market will move, and yes, there's always a possibility of a sudden dip or even a crash. Manulife Insurance MVP secures you from this by ensuring that you'll get your benefits and returns no matter what happens.
MVP offers to keep you covered as long as you've fully paid your policy (which often takes a couple of years of contributions).
One of the hurdles with geting insurance-investment plans is having to schedule a medical exam to see if you're fit to get a policy or not. Aside from from tight schedules, doing so can also be very intimidating, and worse, disheartening when you're denied. MVP takes away this road block and allows you to go through with the application as long as you meet certian health requirements.
As your investment will be professionally managed, MVP assures you that what you put in will grow.
Unlike permanent life insurance policies, MVP has guaranteed paying periods of five, ten, or 15 years depending on your needs. This makes this product pretty ground-breaking as (if you go back to the second number), you're still fully insured even after your payment period is done as long as you've paid your policy in full.
How much does this cost?
Manulife Insurance MVP premiums start at P20,000 a year, which is P1,666 a month.
Is getting insurance really necessary?
Maybe not, but it's a smart thing to do. When you're in a pinch, money is the last thing you'll want to worry about, so whether it's this new product from Manulife Insurance or any other product from other providers, they're all worth taking a look at. Find one that suits your needs, because there's nothing like knowing that you have a safety net to catch you if all else fails.
For more details on Manulife Insurace MVP, visit their website.