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Life Insurance 101 page 3

Variable Universal Life or Variable Unit-linked (VUL) insurance policy seems complicated but it’s quite easy to understand. 

VUL is simply a Life Insurance with Investment in the form of mutual funds.

The investment or living benefit component of a VUL makes it the most popular plan in the insurance segment. You can invest in stocks, bonds or a combination of both. 

"Parang value meal sa fast food restaurant"

VUL policy allows you to get protection of a traditional life insurance and the growth potential of investment funds.

VUL Provides INCOME PROTECTION and WEALTH ACCUMULATION

VUL allow you to hit two birds with one stone– grow your money to achieve your financial goals while staying safe and protected.

It is important to appreciate what a life insurance plan is because it is one of the two components of a VUL. 

Types of VUL

VULs come in two kinds: the single pay and the regular pay.

From the word itself, a single pay policy requires you to pay only one time and it is focused on maximizing the potential earnings of your money through investments. Sun Maxilink One and Sun Flexilink1 are examples.

The regular pay on the other hand, is very much like paying installments for the traditional policy, which is intended for protection, except that there is a separate investment component compared to traditional policies which has a savings component. Examples of regular pay are Sun Maxilink Primeand Sun Flexilink.

How can VUL help you?

There are so many benefits you can get from a VUL package

Below is a sample proposal (10-year VUL ) applicable for a 25 year old, female, non-smoker. The premium amount for this plan is Php 9,300 per quarter or Php 3,100 per month. This means the total amount to be paid for 10 years is only Php 372,000.

Note that premium payment still depends on your age, gender, and other factors I mentioned in Life Insurance 101: page 1. For this example, imagine yourself as the policyholder. 

Here are the GUARANTEED insurance benefits:

Life Protection - Php 1 million

This is the amount your loved ones will get if you die suddenly due to illness, accident or of natural cause. You can leave them peacefully knowing they will receive this amount which is guaranteed.

Total Disability Benefit (TDB) – Waiver

If you get disabled and can no longer work, this rider will waive your future payments and keep your policy enforced so you know longer have to worry about paying for your policy.

Accidental Death, Dismemberment & Disablement Benefit (ADDD) - Php 500,000

If you die due to an accident, your family will this amount in addition to the life protection amount. If you survived the accident but lost any part of your body, you will receive a percentage of the coverage depending on the body part you lost. Or if you become disabled (can no longer work due to accidental disability), you will be entitled to receive the benefit.

Critical Illness Benefit (CIB) - Php 2 million

If you got diagnosed or got treated for any of the 36 critical illness listed you can claim this benefit amount of this rider. This rider covers the top 3 leading causes of death in the Philippines: cancer, stroke and heart attack.

Hospital Income Benefit (HIB) - Php 2,500/day

If you got confined or hospitalized due to any illness or injury, you will receive this daily income for up to 1,000th day per illness. If you got admitted in ICU or confined due to dreaded diseases such as heart attack, invasive cancer, and stroke, the amount you will receive doubles.

What if you’re lucky enough not to die early, get disabled or seriously sick?

The money can be invested in Index Fund, Equity Fund, Balanced Fund, Bond Fund, etc. A financial advisor can help you decide which plan suits your risk appetite.

You don’t have to worry because a VUL policy has an investment component designed to accumulate funds which you can use to achieve any of your life goals. 

In our sample, suppose money is placed in an Index Fund , your money will be invested in top publicly listed companies in the Philippines (i.e. SM, PLDT, Jollibee, Ayala, San Miguel, BPI, etc.). The average historical return is around 10% per annum. Note however, this is not guaranteed as past performance will not necessary indicate the future performance of the fund. 

Investment Opportunity - projected return of 10% per year

  • Projected fund value at age 45 is ₱762,837
  • Projected fund value at age 55 is ₱1,964,759
  • Projected fund value at age 65 is ₱5,087,061

You can use the accumulated fund value as your retirement fund, educational fund for your kids or to acquire business and assets. With a VUL policy, you can fulfill your goals while being safe and protected! 

You can get all of the above benefits by saving only Php 3,100 per month. VUL is not really an expense on your part but a savings tool because of the living benefits you can get. 

Think about the opportunity!
"Anong ibang investment vehicle ang makapagbibigay sayo ng lahat ng ito?"
Faye Rocero, Licensed Sun Life Philippines Financial Advisor
Faye Rocero
Licensed Financial Advisor
Know your actual rates!

We will send you a tailored proposal for you to see the actual figures computed specifically for.