Bakit mahal ang VUL

Ang Variable Universal Life (VUL) insurance ay insurance na may kasamang investment. May kasama itong “fund value” kung saan ang nakalagak ang investment portion ng VUL.

Sa aking karanasan, di hamak na mas mura ang term insurance kaysa sa VUL kung protection ang paguusapan. Noong ako ay 33 years old, nagpa-quote ako ng term insurance at VUL sa insurance coverage na PhP1 million.

Ang premium na binayaran ko sa aking term insurance ay PhP2,950 per year lamang samantalang ang premium para sa VUL ay PhP68,400. Mas mahal ng 24x ang VUL kumpara sa term insurance!

By the way, sa parehong kumpaniya po ang quote na yan kasi ang mga insurance companies ay parehong nagbebenta ng VUL at term insurance.

Bakit napakamahal ng VUL?

Maraming charges ang VUL

Isa sa mga dahilan ay sa napakaraming charges ng VUL lalung-lalo na sa mga unang taon ng policy. Ito ay ang mga premium charge, insurance charge, policy fee, annual management fee at maaring mayroon pang iba.

Commission ng Agent

Ang mga insurance agents ay kumikita sa commission sa nabebenta nilang insurance policies. Kaya marami sa kanila ang mas nagbebenta ng VUL dahil malaki ang kanilang porsiyentong makukuha kumpara sa term insurance.

Kaya para sa akin, mali ang structure ng insurance industry natin na pure commisison basis ang kita ng mga insurance agents.

BTID

Ang pinakamagandang startegy sa pagbili ng insurance ay ang tinatawag na Buy Term and Invest the Difference (BTID). Sa ganitong paraan hindi magbabayad ng maraming charges at hindi rin magsisimula sa 0 ang iyong fund value na karaniwan sa mga VUL.

Mas kikita sa nakahiwalay na investment kung tuturuan mo ang sarili mong mag-invest. In short, pagaralan mo paano mag-invest at huwag iasa sa iba.

vincerapisura.com


48 Comments

  • Wapak says:

    Hello,

    when you reach 65 years old, the chances of you needing life insurance does not change. primary reason for getting an insurance are these:

    1. Income replacemanet
    2. Asset protection

    You need insurance as income replacement when something unexpected happens and your family is not ready yet. this scenario falls during your productive years.

    On the other hand, as you get older, you will gain wealth. you will acquire assets that had to be protected from taxes when you pass. This is where Insurance comes in. This is why you still need to have insurance when you reach your retirement age. in fact, Insurance becomes highly important at this point because this is the time when you will have to have Insurance for asset preservation, but you will not be able to get one because of your age.

    This is the problem with BTID.

    BTID does not solve problems like this. it is conceptually good but if you try to apply it in real life, it will not work. For BTID to work on your advantage, you have to die early.

  • Wapak says:

    Hello,

    anong specific advantages po ba ang hinahanap niyo?

    ito po yung mga gusto ko sa VUL:

    1. covered ako until age 100
    2. habang buhay pa ako, pwede ko gamitin pang retirement fund yung investment na laman ng VUL ko
    3. yung investment side na laman ng VUL ko, alam kong makukuha ng buo ng family ko in case mawala ako. tax-free.
    4. dahil covered ako until age 100, di ko na kailangan alalahanin yung mga assets ko dahil sure ako na malilipat yun sa family ko in case mawala ako. may malaking sobra pa.
    5. thru the VUL, hindi lang mababayaran ng family ko yung estate taxes, tataas pa net worth nila.

    how about sa BTID? is there a way na ma-secure ang future ng family and the succeeding generations using BTID?

  • Vincent Rapisura says:

    Hello, would appreciate if sinabi mo exatly kung ano ang side na gusto mo sa VUL para ma-explain ko sa iyo nang mas mabuti according toyour context. Tama ba? Sa message niyo po, wala pong nakalagay na specific advantages.

  • Vincent Rapisura says:

    I agree with Beverly. Better to separate insurance and investment.

  • Hello vince,

    Did you consider estate taxes in your computations?

  • Wapak says:

    Hello.

    VULs are the best Insurance product you can get.

    Here’s why:

    1. Your family will get the death benefit if you die too soon.

    2. Your money is placed in the mutual funds, therefore, your money will grow over time which you can use when you live too long

    3. If used properly, it can give you tax advantages which will never be given by Term Insurance

    4. Once covered, you are covered all the way (until age 100)

    Bakit pangit ang Term Insurance:

    1. You are only covered for a certain amount of time. That’s why it is called Term Insurance

    2. Term Insurance may appear cheaper than VULs. But if you’ll look closely, there is no value for money in Term Insurance. If you live longer than the coverage given to you by your Term Insurance, you are practically throwing away your money.

    3. if your Term Insurance expires, there is no guarantee you can get another Term Insurance that easily. Or probably you won’t

    4.if you live longer than your Term Insurance,
    It means that your assets (houses, cars, cash in the bank, cssh investments, etc.) will be exposed to estate taxes once you leave this world. Which means, your assets will become a burden to your family if they don’t have the cash to pay for the taxes. Which should be settled in 6 months.

    5. In fairness, Term Insurance is used if you need to boost your protection right away.

    Ex: if you avail a house loan from the bank or somewhere else and they require an MRI. Term Insurance can be one of the cheapest options for that purpose.

    But honestly, you can also use VULs for that.

  • gerocelle says:

    What company do you suggest I should get BTID?

  • Dom says:

    Hi Sir Vince, Just wanna ask you why do you need a property insurance to protect your estate? I mean not all estate are about properties right? It may also include cash on bank and other investment. As far as I know, estate protection or planning is about reducing your estate taxes and avoiding your assets being frozen in case of untimely demise.

  • Jeddah Santos says:

    Hi sir vince. Im 25 years old and im the eldest in our family. Just got an insurance from bdo life today pero im confuse kung anong tawag dun s life insurance n yun. First time ko po mginvest so kulang kulang and details na natanong ko. I still need to go back to the bank to ask them. Pero accdg to the financial advisor, its an insurance with investment like 2 in 1 product. They said i just need to pay 25k yearly which is like (2k monthly) for 10 years (so like 250k) and covered n ko 1M incase something happens, but if God will permit and I reached 65 y/o I can get as much as 5M. Ano po kaya tawag dun s insurance n yun? Un po b ung tntwag nila na VUL? Tingin nio po pangit ung insurance na nasimulan ako? I really need a good financial advisor. Hope you can help me sir. Thank you and Godbless.

  • Jethro Moses Aquino says:

    Sir vince good day! ask lang po sana kung saan mas maganda mg invest ng funds, sa money market funds o equity funds? planning to invest in BPI po kasi. Ang Pag-Ibig ay isa rin pong Mutual Fund di ho ba?

    • Vincent Rapisura says:

      Hello. Unfortunately, hindi ako nagri-recommend ng produkto, negosyo o company. This is to keep my independence from them. =)

  • Jhay SaN Antonio says:

    Thank you Sir Vince sa mga makabuluhang information na ibinahagi sa mga Filipino na naguguluhan sa mga product/policy ng mga insurance company,,dito ko lang naiintindihan ang mga kinapupuntahan ng pera kaya pala ang laki per year na hinuhulog sa VUL,,salamat sa pagbukas mata sa ganitong practice at set up ng mga insurance companies..
    God bless.

  • Ruchie says:

    Is VUL somehow the same with IUL? If not, w/c is better?

  • ros says:

    What i dont like about term insurance is that the insurability of the person is not guaranteed for whole life. Usually up to 65 yrs old only.And u have to renew every year for almost 30 years. Whereas in VUL,there is a limited paying period like 5 or 10 years where the insured person is at his prime..physically and financially healthy.

    • Vincent Rapisura says:

      When you reach 65 years old, the chances of you needing life insurance is very low because usually you have no dependents when you reach this age. If your intention is for retirement, then insurance is not the answer there. Investment is. If you are up for protection of your estate, then the financial product appropriate for these would be property insurance. I did time value of money analysis on 5-10 years (theoretical) payment schemes of VULs and it is still better to do BTID. =)

  • Peaches says:

    Hi Sir Vince.. there is two sides of the coin isang side lng yung nabanggit mo.. Im a pro VUL believer I have a VUL policy and traditional policies na hindi ko sinusuko kasi iba iba sila ng purpose and guys if may suggest please do not surrender your all insurance policies..malay mo bukas di ka na tanggapin kumaha ng insurance. Kausapin nyo ang financial advisor nyo

  • Ampie Nieva says:

    INCREASE YOUR CASH FLOW that is the first step that you need to do. If you are only relying on your salary getting all these insurances and investments will make your budget and net income low and later you will find out that its not enough to cover for other expenses. If you have manage to build an investment or business that will give you passive income to cover for all of these then well and good. All insurances and healthcare are good but we need to study it before getting one. Always remember that there is no assurance if we will just rely on our active income. What if you lost your job? do you have emergency fund to cover for your monthly expenses?

    Identify your net worth, baka kasi kuha lang tayo ng kuha ng insurance na di natin alam ang networth natin. to compute for the right coverage –
    Life insurance is equivalent to 10 years of your monthly salary or expense. Retirement fund is equivalent to 20 years of your monthly salary or expense. Always remember that it takes 20 years to build a retirement so the earlier you start the better.

    Hope this helps.

  • Hi Sir Vince,

    Agree po ako na mahal talaga ang insurance sa Pilipinas. Sa pagkaka alam ko, dahil daw ito sa mga factors like:

    1. high mortality rate ng pinoy sa pinas, kasama na dito ang high crime rate in comparison to other countries.
    2. access to health care sa pinas is medjo mahirap. although maganda talaga ang mga hospitals natin at mga magagaling ang mga doctor at other medical staff, medjo nahihirapan lang ang average na pinoy na magpa-admit kasi mahal ang downpayment, lalo na pag walang health insurance. kung kaya pa ng biogesic or alaxan, di pa kelangan mag pahospital.

    so i think eto yung rason na bakit ang mga insurance providers, kahit international pa sila, konti lang talaga maiibigay nila na coverage sa mga pinoy na nasa pinas kasi higher risk po tayo as a country.

    nakokompara ko po kasi yung nakuha ko na life insurance sa pinas at ang nakuha ko dito sa UAE. yung sa pinas ko na life insurance (from an international provider din),

    -nagbabayad po ako ng monthly na around PhP 9,000 for 10 years
    – yung life cover ko is Php 2M
    – at ang critical illness ko is Php500K.

    Nabentahan lang siguro ako dati not knowing the real cost of insurance sa pinas. Pero kumuha parin ako dito sa UAE kasi feel ko kulang talaga insurance ko and for my family too. Yung nakuha ko na international life insurance (i can claim kahit saang bansa man ako), at hindi naman siguro to na fly by night na company kasi they have been in the industry for more than 150 years.

    – ang life cover ko is $120,000 (around P6M at today’s exchange rate). Yung iba ko nga mga kakilala umaabot nga sila ng $300K at the same monthly premium ko dahil bata pa sila kumukuha.
    – ang critical illness benefit ko is $80,000 (around $4M)
    – pero yung binabayaran ko is $150 per month lang for 10 years din. pero insured na ako until 95 years old. super swerte na talaga ako if aabot ako nyan.

    so yung kinompute ko yung cost of insurance sa pinas and uae, ito yung lumabas:

    Pinas
    total na mabayaran ko sa insurance in 10 years = P1.08M
    Coverage ko = P2M

    so parang na doble lang yung pera ko in 10 years. that is if buhay pa ako in 10 years.

    UAE
    total na mabayaran ko in 10 years: $18K
    coverage ko = $120K (hindi ko na sinama yung ibang benefits like permanent total disability (kasama na dito ma bed ridden ako) na $80K din on top of my life cover na valid until 70th birthday ko)

    so bale more than 6 times yung balik ng pera ko po sa insurance ko dito sa uae.

    lahat naman tayo ma dedo, di lang natin alam kelan. pero at least may malaking pera ang maiiwan. at aside sa life cover, kung magka critical illness na ako may $80K akong pwede mag gamit pang treatment or pang negosyo, kung may matira man. :p

    sa tingin mo po, mali ba ang desisyon ko?

    salamat po.

  • Roey Dejino says:

    Sir Vince thank you so much for educating us. It helps a lot lalo na sa mga katulad kong magsisimula pa lang. Please continue with your advocacy. More power!!!😊

  • Hi sir gusto ko lng malaman kung yung insurance b nakasama ng VUL is life time n after ng term like 5yrs o during investment lng?

  • Marj Val says:

    Hi po. Private Nurse po ako dito sa Pinas at on process na yung application ko sa abroad hopefully this yr o early next yr ako makaalis. 26yrs old plang po ako at while andito ako sa Pinas okay naman po monthly salary ko. Ask ko lang po sana, balak ko sana mag open ng VUL sa sunlife 60k/yr sya kaso sa nabasa ko dito napapisip ako. Ano ba mas okay? VUL o specific health/life insurance lang? Ano ba yung term insurance? Balak ko din pumasok sa UITF.

  • Gie says:

    Good am vincent,I’m 57 y..o. pde p ba ako s term insurance? If ever hmm my monthly payment? Thank you and more power.

  • Karen says:

    Yung term insurance ba may inclusion na accidental benefits/ TPD/ LBC which covers critical illnesses?

    • Vincent Rapisura says:

      Get separate health insurance instead of health riders that are limited in scope such as critical illness.

  • Elvie says:

    Nako, may VUL din ako. Okay nman ung binabayaran ko so far di sya ganun kabigay. Ang sister ko na hinikayat ko sa VUL ng SUNLIFE masyadong mahal ung kinuha nya. I think she was duped, nkakainis lang. Since she just started VUL last Dec lang, I told her to drop her policy and select a cheaper version of life insurance. Ayaw nya makinig. On my part since I have VUL na, I’m looking for Health Insurance since most of our relatives are stricken with critical illnesses. Ask ko lng po kung di redundant ung kumuha ng health insurance payable within 10years na may mutual fund na ksama or prang same charges din sya kgaya ng VUL? I’m planning to invest in UITF din po and sa Coop dito sa amin. Thanks po Sir Vince for teaching Filipinos to be Financially aware and more power!

  • Haki says:

    Hi Sir Vince. I have 2 VULs po sa Sunlife and sa PruLife. Nabasa ko po yung comment nyo na ndi pala dapat maginvest sa VUL. Un po kasi ang pinush ng Financial Advisor ko kaya akala ko po ay tamang investment sya. Pano po ba ang tamang gawin para dito, kung iwiwthdraw ko nmn po yung nasimulan ko, lalo ako malulugi kasi may mga charges for early termination. Un isa pong VUL almost 2yrs na po sya and the other one is 1yr. Is there any advice po ba in my case? Thank you in advance

  • Abhoo says:

    Thank you for personally replying in every queries.. It shows that u’r really dedicated to help everyone who’s willing to be financially literate. I just shared ur posts to my cousins so that they’l be open about these matters at their young age.. God bless your plan and your life as well.

  • Rein says:

    Hello Sir Vince, just asking sana so hindi talaga ideal ang VUL?? I have my VUL sa Prulife. My mutual fund ako sa FAMI, naginvest sa isang cooperatiba and UITF naman sa PS BANK after I read your Articles about sa VUL, Narealized ko na mas ok pala na life insurance lang talaga dapat at walang kasamang investment pero bakit yan ang pinush sakin ng Financial Adviser ko? So much better palang kumuha pa ako ng isang insurance na pang life insurance mismo?

    And Sir Vince please help me, minsan nahihirapan ako ibudget ang pera na dumadating sakin,parang lagi nakamindset sakin mas malaki dapat ang nilalagay ko sa savings ko, kaysa sa expenses ko kaya minsan nakukulang kaya tendency nawiwithdraw ko ang emegerncy fund ko. I have a 2 bank savings account. One for the emergency fund and the other one is for my savings.
    Thank very much,

    • Vincent Rapisura says:

      Hi Rein, I think you are on the right track except for the VUL. Nagkakamali talaga tayo. Kung ipagpapatuloy mo yan, lalo kang matatalo. Mas malaki kasi ang commissions sa VUL kaya yan ang pino-promote ng insurance companies.

      Panoorin ang video namin about budgeting: http://vincerapisura.com/5-15-20-60-budgeting-rule/

      Please help me spread my advocacy by liking my page and sharing my posts.

  • Rain says:

    But term insurance is only up to 30 years. Anong mangyari if hindi namatay ang insured po? I don’t like VUL…mahal na at variable pa… Is there an IUL sa Pilipinas? Index Universal Life policy is the ferrarri sa insurance but I don’t know if mayroon dyan. My friend who visited US was able to get a guaranteed IUL from Transamerica. 4 years later she was even able to borrow from her policy.

    I am glad that our kababayans started to think for long term financial goals. Educating ourselves about finances is the only way to better ourselves financially. Work hard but work smarter and save for the future… Goodluck to our financial endeavors!

  • Jessica says:

    Hello sir Vince, pawede po ba kayo magtecommend kung anong company ang makukuhaan ng term insuranxe.

    • Vincent Rapisura says:

      Lahat po ng insurance companies sa Pilipinas ay nagbibigay ng term insurance. Mamili na lang po kayo ng gusto niyo. Hindi po kasi ako nagre-recommend.

  • marichu says:

    Alin mgandang insurance na mababa lang sir

    • Vincent Rapisura says:

      Sa life insurance, I recommend term insurance.

      • Edwin says:

        I dont think so,;term insurance? How about kpg humaba p ang buhay mo tapos dk n mainsured kc mahal n ang ptemkum, id rather go for permanent insurance

        • Vincent Rapisura says:

          The insurance portion in term and VUL are the same. It’s the investment portion that makes it expensive. Ask your agent how much is paid for insurance premium in permanent plans and you’ll find out the premium is the same. The balance is supposedly for your investment. But if you take a look at the cash value or fund value of the investment portion, it nil on the first year. Where did the money go? –Commissions of agents and fees to insurance companies. That’s why it’s better to do BTID. If you employ time value of money analysis, yo will end up with better investment returns.

          PLease refer to my previous articles:

          http://vincerapisura.com/bakit-mahal-ang-vul/
          http://vincerapisura.com/ibat-ibang-klase-ng-insurance/

  • Susan says:

    Sir vince ask ko lang ang prulife ba ay stable din na insurrance comp.

  • Generoso Embuido Ferrer Jr. says:

    Hi Vince! I am Generoso. OFW nurse from Qatar. I have VUL sa sunlife, term insurance sa Pioneer and health insurance with Kaiser. I am also investing in UITF thru BDO and mutual fund sa philequity thru IMG. I have my business as remittance service travel and tours sa Uxpress. Few months from now, I am about to finish my downpayment sa condominium with DMCI before the unit turnover. Monthly, I am sending money for my family around 15, 000php. With all of these, it seems I don’t feel I have much money na natitira sa akin for my own leisure, travels and wants. I feel like I need to work more. I have been working here since October 2015. Do you have any advise? I need someone to help me fix my financial directions. I mean, a straightforward plan. Thank you.

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