a Sun Maxilink Prime is a VUL plan from Sun Life that may be paid in 10 years. It has the combined benefits of life insurance protection and investment component that helps your money grow over time. Making it the best-selling VUL plan of Sun Life.
You might be wondering why the VUL plans are the popular choice of many when it comes to life insurance?
So here’s a brief explanation of why and how it could potentially answer your financial needs.
The Stoplight Mechanism: Start, Stop and Wait
As a financial advisor, it’s reasonable to meet someone who has zero knowledge about investing. But the worst part is meeting an existing VUL policyholder who doesn’t know how it works. Simply, a heartbreaking moment for every financial advisor. So please don’t get any plan unless you understand it well.
That’s why I devised a simple yet effective way of explaining it to my clients and I call it the“stoplight mechanism”. It is composed of 3 easy to follow steps anyone can remember when securing their future with a VUL policy. Parang stoplight lang kasi yan, kailangan mo lang mag-start, stop, at wait. Madali lang ‘di ba?
As you know, VUL is a combination of life insurance and investment. The cost of life insurance is highly driven by age making it expensive as you get older. But it’s also affected by other factors like avocation, residency, profession, health condition, etc. Starting your plan today means you will get it at a relatively cheaper price than getting it in the future.
I highly encourage everyone to get their insurance policy as early as possible most especially if you love discounts? I love it and I believe everyone does. Getting an insurance policy as early as now means your getting it at a discounted rate.
The image above is an example of three guys who purchased a VUL plan like Sun Maxilink Prime at different ages. They have the same life coverage of Php 1 Million, waiver of premiums, and accidental death, dismemberment, and disablement benefit of Php 500,000. You will notice that the premium increases with age and the difference increase greatly as they get older.
The premium for a 25 yr old male is only Php 25,310.50 per year or just Php 2,109.21 per month. Ang mura lang diba? You saved Php 4,951.5 compared to a 35 yr old male and a whopping Php 21,256 per year compared to someone who gets it at a later age of 45. Sun Maxilink Prime is 10 years to pay VUL plan from Sun Life. So the discount you get after 10 years is actually Php 49,515 and Php 212,560, respectively. Tama, mas malaki ang matitipid kung kukuha ng mas maaga.
There are three important factors in investing and that’s time, money, and interest. You need at least one of them to make your investments grow. If your goal is retirement at age 65, it means that a 25-year-old guy has 40 years from retirement, 30 years for the 35-year-old, and 20 years away if he’s already 45-year-old. Can you guess who has the most retirement fund? Yes, it’s the 25 years old guy because he has more time to let his money compound.
Suan, ano yung compounding? Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit. Sa madaling salita, yung tubo mo ay tutubo ng tutubo at iyon ang magpapalaki sa kapital.
After the paying period, you will have an option to stop paying the premiums but if you wanted to speed up the accumulation of funds then you can add more money from time to time. If your policy is Sun Maxilink Prime then you can stop paying it after 10 years time.
Because of the manageable payment scheme, it also gives a sense of accomplishment to the policyholder once done. Imagine the feeling you get when your kids (or future kids or even younger sibling) finish schooling, it gives you motivation and confidence that what you’re doing is right.
This is the most confusing part to my clients and other existing policyholders. Most of them thought that after the paying period they can pull out their money with hefty returns already but that’s wrong.
Investing is like growing a tree and you make them grow by adding water (i.e. your premiums), fertilizer (i.e. placing your money in a high-interest financial instrument), and giving it ample time. Yes, you need time and it’s the most important among the rest. You won’t get a tree by planting a seed and leaving it for overnight. The same goes for your investments. You don’t expect them to double in just a couple of years.
Note that the best friend of compounding is time. You need time to compound. Don’t get too excited yet just because you finished paying the premiums, rather treat it as the start of your beautiful journey toward financial freedom.
What is Sun Maxilink Prime?
Sun Maxilink Prime is 10 years to pay VUL plan from Sun Life. It has a combined benefit of life insurance protection and has an investment component. Aiming to provide you with financial security and peace of mind while you grow your funds over time.
Applying the Stoplight Mechanism in VUL Policy
I will share with you the proposal I made for myself. As a millennial, I want my plan to be affordable but will still provide me with enough life insurance coverage and good retirement fund at age 65.
Federico Suan, Jr.| 25 yrs old | Male | non-smoker
START at age 25 and pay Php 25,310.50/yr or just Php 2,109.21 per month for 10 years.
STOP paying the premiums at age 35 with a total accumulated fund value of Php 231,017.
WAIT until age 65 to have Php 3,891,872 worth of retirement fund.
So here are the benefits of Sun Maxilink Prime:
Life Insurance Benefits
- My family will get a lump sum of Php 700,000 if I die early due to an accident, illness or natural cause. This amount can help them proceed with their life even after my sudden demise. Hopefully, my brothers will use this amount to finance the needs of my Lola and younger sister.
- I also attached a waiver of premium (Total Disability Benefit or TDB) that will waive my future payments if I get disabled and can no longer work. It is as if I am still paying the plan when I get disabled.
- Accidental death, dismemberment, and disablement benefit (ADDD) give me a financial assurance that my family will get Php 350,000 on top of my basic life coverage of Php 700,000 if I die due to an accident. If I’m lucky to survive the accident but lose any part of my body, I’m entitled to receive up to Php 350,000. When I become totally and permanently disabled Sun Life will give me up to Php 350,000.
- Critical Illness Benefit or CIB is a rider I attached to my plan to give me Php 1 Million when I get diagnosed or treated from any of the 36 critical illness that includes stroke, heart attack, invasive cancer, etc. This lump sum will help me with my finances, treatments are really expensive and I don’t want to burden my family.
- Hospital Income Benefit or HIB is also a rider that I attached to my plan. I will receive Php 1,500 per day if I get confined in a hospital. I will receive this for up to 1,000 days of confinement and it will become Php 3,000 when I get admitted to ICU or confined due to any of the following dreaded diseases: acute heart attack, chronic liver disease, dissecting aortic aneurysm, end-stage lung disease, end-stage renal disease, invasive cancer, major organ transplant, multiple sclerosis, poliomyelitis, progressive muscular atrophy, and stroke.
Upon retirement at age 65, the projected fund value is Php 3,891,872 which makes me a millionaire retiree (yippee!). If I decide to retire earlier, let’s say at age 55, I will have Php 1,508,909 which I can use to build a small business. Hopefully, my business venture will become a success. I can also use the fund value for the education of my future kids or buy a house or a nice car.
I can use the fund for whatever purpose I deem beneficial to me and I can withdraw against my fund value when the need arises. Isn’t that neat?
Request for a Sun Maxilink Prime Proposal Now!
Frequently Asked Questions:
Are smokers allowed to avail the plan?
Yes, but you will have to pay more compared to someone who doesn’t smoke.
Can I get the normal rating if I just quit smoking last month?
A non-smoker is someone who did not smoke cigarette, tobacco, and e-cigarette in the last 12 months.
Why is it more expensive for smokers?
Smoking is linked to several health risks making a smoker more prone to illnesses. Thus, the additional premium charge is to compensate for the extra risk he possesses.
Will I be required for a medical examination?
If you have a history of medical conditions then you may be required. Or if any of your family members contracted hereditary diseases. So you don’t have to worry if you are perfectly healthy.
Can I avail ADDD without the TDB?
No, Total Disability Benefit (TDB) is requisite in getting an ADDD. You can get TDB without ADDD but not the other way around.
Is my insurance coverage guaranteed?
Insurance is the only guaranteed amount in the policy. It will not be affected by any fluctuations of your investment fund nor if you made a partial withdrawal.
Is my projected fund value guaranteed?
Your investment is linked to the fund you have chosen, thus it is directly affected by the fluctuations of its unit price. It is not guaranteed but just a projection so it may actually be lower or even higher compared to the value stated on the plan.
Am I required to pay after 10 years?
You may still be required to pay once the fund value is no longer sufficient to pay for the charges. Or if you have medical-related benefits included in the plan like CIB and HIB which are payable until age 70 and 60, respectively.
Will I be allowed to withdraw money from my fund value?
Partial withdrawal is allowed and corresponding charges may still apply. Life coverage will remain in force for as long as the fund value left is enough to shoulder the insurance charges.
What happens to my policy if I get all the funds?
Full withdrawal of the fund value means you’re surrendering your policy to Sun Life. Consequently, life insurance coverage also ceases.
Federico is an electronics engineer, financial blogger, insurance agent, and a certified investment solicitor. A multi-awarded financial advisor with clients ranging from lawyers, doctors, engineers, accountants, business owners, company directors, and OFWs to minimum wage earners had sought advice from him in achieving lifetime financial freedom.