A friend died last week. We are extremely sad about what happened to him. It was so sudden. It was so painful because we’ve been friends for almost 5 years. We know at this time, that losing someone has been normal. But still, no words can be commensurate to the void he left in us. Just like us, he is also an insurance agent. When the news arrived, one thing popped into our minds. We have to immediately check all of his life insurance plans.
Expensive cost of medical treatment
We can only imagine the pain his family is feeling then. With the roller coaster of emotions, reality taps their shoulders. They have to settle an enormous amount of hospital bills.
In the Philippines, when someone dies, they always say not to worry about money because of the donations or what we call “abuloy.”
But if the debt is millions of pesos then it’s hard to settle. On top of it, hospitals don’t release the death certificate until the bills are paid.
The best life insurance plan
Upon checking, our friend has two life insurance plans: VUL and whole life insurance. But sadly, VUL is the only active plan at the time of his death.
His whole life insurance is already lapsed due to no payment. While his VUL plan has minimal fund value that could still last for a few months with no payment.
That’s why personally, I like VUL plan more compared to other plans in the Philippines in terms of peace of mind it offers. Just like what happened to my friend, he was hospitalized and cannot pay his insurance on its due. If he only has whole life insurance then his family will not get anything from those plans.
(It’s always good to diversify in life insurance.)
Thus, the best life insurance plan is the one that is active in the time of need.
When VUL plan is better than any other plan in the Philippines?
There’s an endless argument about which plan is better. While it’s true that you will get to save money on term insurance, for example, it’s not a good idea to get one type of insurance for all your insurance needs.
Because what if, just like my friend, you weren’t able to pay for it for some reasons, then it gets terminated when you need it most.
Another example is a client of a friend who did not continue paying for her VUL plan. Maybe she watched a hate video about the VUL plan. But sadly after a few months, she was diagnosed with breast cancer. In her vulnerable state, she called her agent wishing she could still get something from her plan. Maybe just maybe she can get the fund value.
To her surprise, her agent said that her VUL plan is still active. That’s because VUL plan will not be terminated for as long as it has remaining funds.
Lucky her, she was able to get Php 500,000 to aid her treatment. She can’t thank her agent enough and is convinced that she did get the right plan.
Some find VUL expensive. Sure it is compared to term insurance. But if you think about the peace of mind you can get from a VUL plan it’s worth the extra thousands of pesos.
That’s why you must have at least one VUL plan because who knows, right?
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.