Yes, you should have one and all Filipino’s should get one. This is the product that most Filipino’s still hesitant to get one since death which is the primary driver for Life Insurance is still taboo to discuss.
What type of Insurance should you get?
There are two types. 1. Term Insurance – This is renewable usually every 5 years and the premium also increase due to insurability reasons, it is cheap but no cash value. It’s like your car insurance, if you get into accident, Insurance Company pays you else you get nothing. You can get 1M Life Insurance for less than 10k per annum, and you can also pay per quarter. 2. VUL (Variable Unit Linked) Insurance – This is the most talk of the town insurance and most Financial Advisors advocate this one. This insurance is with fund value, meaning you will get a certain amount based on the performance of the fund value where the IC(Insurance Company) invested. For example, for a 40k per annum premium, part of the 40k is invested to the fund (Mutual Funds etc.). For being consistent on paying your premium, in due time you will get part of the payment plus the insured amount. Let’s get to the calculation.(This is just sample only)
Term Insurance:
  • Age: 25
  • Premium: 10k
  • Insured Amount: 1M
  • Payable until age 70
Year 1-5 : 10,000 age:30
Year 6-10: 12,000 age:35
Year 11-15: 14,000 age: 40
Year 16-20: 16,000 age: 45
Year 21-25: 18,000 age: 50
year 26-30: 20,000 age: 55
Year 31-35: 23,000 age: 60
Year 36-40: 25,000 age: 65
Year 41-45: 30,000 age: 70
Total payments Made: 840,000
Fund Value: 0
VULĀ  Insurance:
  • Age: 25
  • Premium: 40k
  • Insured Amount: 1M
  • Payable for 10 years (caveat: depends on the fund value)
Year 1-10: 40,000 x 10 Total payments Made: 400,000 Fund Value: It depends on the fund performance. Both have pro’s and con’s, it always depends on your needs and your budget. Still at the end of the day, you need to get one.