A blog by Jacqueline Tabora

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"You've been wasting money on some useless things , now you are short on money again," a thought that has always bugged me whenever I reach the petsa de peligro period every month.

Checking on my annual Grab transportation expenses, all I could say was "What the ---?!?!? I could have bought a new high-end laptop with that much money I spent for my rides the whole year!"

Seeing my bank account balance reaching the big 0 before every paycheck makes me realize, "Where the f--- did my money go? What did I do with my cash?" Only at that point have I come to my senses that I am not managing my money very well, simply because I spend it for temporary and one-off stuff, thus, I get short on cash or I empty my wallet all out most of the time.

On top of my mind, I said to myself, "Things should not be this way. I should find something worth putting my money on." 

So, late last year I decided to apply for a variable universal life (VUL) insurance.  I could have been an insured client a long time ago, only that I did not trust the insurance company because 1) I was young and have no idea what insurance and insurance companies are back then; 2) I was swayed to get insurance in a very shady and forcefully deliberate way. Making up my mind to try it once again and invest in it in the long term, I sought help from a then-colleague of mine who embarked on a part-time job as a financial advisor for a top insurance company in the Philippines. In late 2018, I officially invested in life insurance, a VUL one.

I have been hearing about insurance and VULs for some time now from former colleagues and friends, and while I did my own research about this, there are much more to learn about this subject. 

Considering getting insurance? Let me share with you my 5Qs (five questions) to ask yourself before getting insurance. Pardon me for not being technical about it or if my idea of VUL is just at face value.

1. What do I know about variable universal life (VUL) insurance? 
  • By term definition, a VUL is a form of life insurance that comes with a savings or investment component. I personally call it "health emergency fund with extra savings on the side". 

2.  Do I need it?
  • Insurance is not a common "expense" in the Philippines so one would probably think it is not a necessity and does not have a part on one's monthly expenses. I, too, once believed in that thought, until I got hospitalized early this year and got scared where I'd get the money to pay for hospital charges. Now I can attest that one way or another, now or sometime in the future, you might need health insurance. It's a common notion amongst company-employed people like me to say "Well, we have company-issued HMO, so...", and while I do agree, health insurance is a great financial backup. 

3. I am interested, how could I start investing in such?
  • Choose among the accredited insurance companies in the Philippines by the Insurance Commission. You have probably heard some of them or see their signages along central business districts in Metro Manila. Some of the popular ones are Sunlife, PRU Like UK, AXA and Manulife (I know of these companies because of former classmates or colleagues working part-time on the said companies). Contact an insurance agent from the said insurance company, set up an appointment and discuss with them insurance premium quotations.

4. What if I don't have much money to invest in VULs or health insurance?
  • It all boils down to a well-managed budget and set up priorities. I know it is easier said than done, and all of us have different lifestyle and expenses, but if you are not going to allot a portion of your budget today for insurance, then when? Monthly insurance premiums usually range from Php1500 to Php3500 which can be paid on a monthly or quarterly basis.

5. What do I get with a variable universal life (VUL) insurance?
  • My personal take on the benefits of having VUL insurance are the following:
  1. For personal health security. Sure thing a company-issued HMO for an employee like me would help in case I get hospitalized for whatever reason but that is only until I am employed in the company. Personal insurance allows a wider illness coverage and at times offer hospital income benefit (or HIB, in case your hospitalization days will be unpaid by your company as they are not filed deducted to your leave credits).
  2. For the financial security of your family. I can't sugarcoat this part, but it just means for whatever reason that you will no longer be able to function and earn for you or your family, insurance will take over and do the money work for you.
  3. A passive but growing savings component. As mentioned above, a VUL insurance is a combination of life/health insurance and savings. Included on the monthly insurance premium an insured client pays is the savings, which would be invested on different stocks to make the money grow. 
I, too, had reservations in getting insurance. It took me years before I decided that it is time to get one now because as they say, it is better to start on insurance while you are young. Now I see to it that I set aside a portion of my budget for it and treat it as a priority expense (just like how I do with my monthly fees for house rent, Internet, transportation, and meal expenses). 

Is investing in a VUL insurance too big of a leap/decision to put my money into? Maybe. But have I taken that leap and made that decision at the right time? I would like to think so. I am not getting any younger, the time is now. :)

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