I first encountered the idea of creating a Financial Plan in August 2010. I was really impressed by the idea of saving money, insuring and investing money for me to achieve my financial goals in the future. I did not know anything about it and when I understood it, I was hooked. The first plan that I had was a traditional life insurance, which had a life insurance coverage of Ph300,000 which had cash value that I can loan.
Later on, as I studied more about Financial Planning, I learned Variable Unit Linked(VUL). It has Life Insurance and Investment. I was really amazed by the idea of insuring myself and at the same time my money can grow either in Stock Market,Money Market, or Bonds. It makes easier for me to participate on different investment vehicles which can help me to grow my money for my future needs while insuring myself at the same time.
As defined by ANC:
I find it cheaper and convenient in the long run compared if I buy term insurance and invest the difference. It pushes me to be disciplined that I always put money to my VUL. It helps me to focus on one financial product that has 2 benefits already. I think the problem with buy term insurance and invest the difference will make you spend the difference than you invest it. Knowing that in our culture that we tend to spend than to save and invest and most of us do not have a discipline.
I have 2 policies of VUL now. One is regular premium payment which gives me a life insurance coverage of Ph1M, a dread disease fund of Ph300,000 and it has an investment component that will make my money grow and the second one is a One-time pay VUL that is focused on investment which has minimal life insurance coverage.
For me, getting a VUL is a good stepping stone for me to create a habit that I regularly put money and it can grow long term while insuring myself. With this saving habit, I can also diversify to different financial vehicles that I can grow my money. Growing my money in stock market will help me to achieve my financial goals in life but if I die soon, my family can be taken care of without me.
So, why not VUL?