A friend died last week. We are extremely sad about what happened to him. It is so sudden, which makes it very painful because we have been friends for almost five (5) years. We know by this time that losing someone has become common. 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; check his insurance policies.
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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 the debt is millions of pesos; it is hard to settle. On top of it, they must pay the bills to get the death certificate from the hospital.
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 is still active but has minimal fund value that could only last for a few months.
I like a VUL plan more than other plans in the Philippines because of the additional peace of mind. 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, his family will not get anything.
(It’s always good to diversify in life insurance.)
Thus, the best life insurance plan is the one that is active in time of need.
When VUL plan is better than any other plan in the Philippines?
Because what if, just like my friend, you were not able to pay for it for some reason? It may get terminated when you need it most.
Another example is the 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 if she could still get something from her plan.
Maybe she could get the fund value.
To her surprise, her agent said her VUL plan was still active. That is because a VUL plan will remain active for as long as it has remaining funds.
Lucky her, she got Php 500,000 to aid her treatment. She cannot thank her agent enough and is happy she got 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 is worth the extra thousands.
That’s why you must have at least one VUL plan because who knows?
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.