Saturday, July 25, 2015

VUL or Term Insurance?

In this post, I would like to highlight the reasons why a VUL is better that term insurance in all aspects other than one: budget. If you can save up at least 40k per year, go with a VUL.

For starters, a term insurance is a yearly renewable policy that:
1) is very affordable relative to the coverage amount (8,000 annual premium can cover your life for 1M;
2) is temporary, that is, you will have to pay yearly to get covered;
3) is not invested in the stock market (no withdrawable cash even after years of payment);
4) increases its yearly premium depending on the risk and age of the applicant.

Comparatively, a VUL is a policy with fixed premium payment duration and fixed payment amount. Say, my personal VUL that is:
1) a 5-year, 70k per annum deposit arrangement whose premium is partially invested in the stock market (hence there is withdrawable cash after years of depositing);
2) permanent; there is no need to renew and reapply;
3) Expensive at 70k per annum;
4) Eats up money that could have gone otherwise to mutual funds;
5) Provides estate tax exemption to cash, savings, time deposits, mutual funds, UITFs in the form of topup.

Now for the comparison. Many people believe in the principle of "pay a minimum for your insurance and invest the difference". While this is true, and a term insurance will likely do the job leaving one with more investable cash, it will fall short in some important aspects.

One can become uninsured when the term insurance renewal application is declined. Reasons include:
1) having had an illness, critical or otherwise, having become too old or too risky for the insurer;
2) Increasing premium as one ages and if one reapplies with a health condition;
3) Impossibility of having your cash savings tax-shielded (I plan to withdraw a large part of my MFs and trading capital and top it up onto my VUL before death, and it is possible).

Some say getting a term insurance first and then availing a VUL in the future makes more sense. However, getting a cheap term insurance in the early years and then deciding to get a VUL, say, at age 45 will result to VUL premiums that have become more expensive and its benefits too low.

Here is the takeaway:
Get your limited pay VUL and have your life and health insured permanently. Below is the numerical reason why I preferred a VUL to term.

*With a term insurance, from age 28-90 I would have paid roughly 930k worth of premium deposits. This does not have any withdrawable cash. I am also at risk of being declined upon renewal.

*With a VUL, from age 28 to 33, I would have paid 400k. I may have 5M withrawable at age 65, covered by 1M critical illness till age 75, AND at least 1M guaranteed death benefit till age 100.

Returns of VUL:
Total premiums paid: 400k
Total benefits by 20th year: 1M Life + 1M Critical Illness + 1.5M withdrawable cash
ROI: 775%

It is not a matter of what works for you or what makes you happy, as some financial consultants would say. There are objective, quantifiable things in this world and insurance is one of them.
Go with a VUL if you can save 40k yearly.

Horeb Eliot
Premiere Financial Consultant, Philamlife
Professor, Political Science and Economics of Development, UP

Wednesday, June 11, 2014

Scholarship in Korea 2014-2015

This is like the best ever scholarship provider ever!
Did I already say ever?

*DJU-ASEAN Scholarship*

Monday, June 9, 2014

Scholarship in Korea for Government Employees 2014-2015

KOICA Scholarship Grants for Government Employees
Magandang umaga po! 안녕 하세요?
We are pleased to inform you that the deadline for the following courses has been extended:
Course: KOICA-Yonsei Master’s Degree Program in Community Development Leadership
Institute: Graduate School of Government and Business, Yonsei University
Duration: August 2014 – December 2015 (16 months)
Deadline: 18 June 2014
Course: KOICA-Chonnam Master’s Degree Program in Community Development Leadership (KOICA MBA Program for Leaders for Regional Innovation and Sustainable Economic Development)
Institute: Graduate School of Business, Chonnam National University
Duration: August 2014 – December 2015 (16 months)
Deadline: 18 June 2014
And for the KOICA-Yeungnam Master’s Degree Program in Community Development Leadership, application period ends on 11 July 2014.
Institute: Graduate School of Government and Business, Yeugnam University
Duration: October 2014 – February 2016 (17 months) Deadline: 11 July 2014
Should you have questions, kindly get in touch with Ms. Maria Regina P. Arquiza at 403-9780 or send her an e-mail at
We look forward to receiving your applications in due time.
Thank you.

(Repost from Pinoy Scholars in Korea)

Sunday, June 8, 2014

Even if no man is an island...

The least I would like to witness is for myself asking for donations. Not that I'm proud. It's just because, once in my life I had been an able, productive worker.

A well-thought out financial plan: a mix of investments, savings, liquidity, and insurance would keep one ahead of many financial stressors.  

Saturday, June 7, 2014

Bringing Home the People

If you are an OFW and mayroong konting dependents lamang, there is a savings strategy and facility that will allow you to go back home in just after 7 years of working.
You will be self-sustaining, receiving monthly interest earnings, with full health coverage.

With the right mix of mutual funds, time deposit, VUL, and insurance, you can retire early and be closer to your family again.

Thursday, June 5, 2014

No one is exempted from the need to save

I feel deeply sorry for our 'bagong bayanis' in the link...
but in my heart of hearts, I have to say that half of life's misfortunes are of our [own] doing. We can never blame that half to others, or make asa to the government for at least half the reparation. The half: is in our hands.

There are plenty of ways to protect labor and hard earned cash after years of hard work. In my sense, it is through saving intelligently through stocks-linked investments.

It all starts with opening an investment account through major banks in the Philippines. A one-time P5,000 is a small amount for a big leap in any one's financial future.

Tuesday, May 20, 2014

SSS Pension: The Hidden 5-year Time Loss

A Must Read FYI for Pinoy Employees

Alam mo kung magkano ang monthly SSS mo? Alam mo rin ba na at least 5 years kang dapat buhay para marecover mo lahat ng premiums mo? Cling on to dear life ka till 65.

GOOD THING is, we can reverse the counting. Save today for 5 years habang bata pa, and you will get at least 7x more than your monthly SSS pension.

There's a savings design to achieve just that.

Computation for people who earn over 15,750/monthly, contributing for 15 years:
MSC *40%
16,000 *40% = P6,400 monthly pension
Gross Contribution: P316,800
316,800/6,400 = 5 years before you can recoup all your payments.

IBIG SABIHIN: binabawi mo lang lahat ng naibayad mo. Your living on interest starts only from 65th year onwards. Is this very wise?