Ok ba talaga ang VUL para sa estate taxes?

Hindi.

Sa totoo lang, in my opinion, ang pag-intindi sa estate taxes, para mag-benefit pa ang mga papamanahan mo gives not a very good message.

First, we overly protect our heirs. Where in fact, they should be able to take care of themselves on their own. Papamanahan mo na, iisipin mo pa ba ang estate tax.

Look, si Warren Buffet, Bill Gates at iba pang mga tycoons ay hindi magpapamana ng lahat ng ari-arian sa kanilang mga anak. Ito ay dahil gusto nilang matutong tumayo sa sariling paa ang kanilang mga anak at hindi maging complacent at aasa na lang sa pamana nila.

This kind of pamana mentality breeds entitlement and builds astronomous social divide. So ditch it.

Second, madami na palang pera ang pamilya niyo. The estate tax is meant to re-distibute wealth kasi mataas po ang ating GINI coefficient. Napakaraming mahihirap na makikinabang sa estate tax ninyo. Kaya huwag po kayong manghinayang.

Third, term insurance provides a better option if you don’t touch the investment and let it grow using the BTID strategy. Mas maliliwanagan ka kung nabasa mo ang “Paanong mas maliit ang fund value ng VUL kaysa sa BTID” at “Ok ba talaga ang VUL kasi protected ka nito beyond 65 years old compared to term?”

Ayon sa National Internal Revenue Code or NIRC, 20% lang maximum ang estate tax for estates with PhP10 million and above. Iilan lang po ang mag-qualify dito. At para sa mga magka-qualify, matuto po tayong maging makabayan at huwag maging gahaman.

I repeat, estate tax is a mechanism to re-distribute wealth through our national coffers. Sana din po ay huwag niyo masyadong i-spoil ang mga heirs ninyo if you reach this level of wealth.

So if we were to compute extate tax in the figures given in the “Paanong mas maliit ang fund value ng VUL kaysa sa BTID” at “Ok ba talaga ang VUL kasi protected ka nito beyond 65 years old compared to term?” articles, ito po ang kakalabasan sa estate tax ng BTID.

The table clearly shows that even with estate taxes, you still are ahead financially with term insurance.

Heirs who are still dependents, is a different story. Pero kung may dependents ka pa, mas sulit pa rin ang term insurance kaysa sa VUL. Read “Insurance 101” in my blog. This section of my blog debunks a lot of myths that the heavily profit-oriented insurance companies are promoting.