13 Comments on “What is Variable Life Insurance?”

1. Evan
   January 8th, 2010 at 1:08 am

   I would highlight for people the difference between variable and whole life.

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2. Dana @ Blogging Update
   January 8th, 2010 at 8:34 am

   Yup, life insurance is surely for protection only. If for investment, we should use others product such as stock.

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3. Tim
   January 8th, 2010 at 3:03 pm

   I was offered both life insurance and a mutual fund both in one product. I have a wife and kid and I’m 25, at that time I really couldn’t decide what’s right for me and my family. We don’t really have any investment right now that could replace my income. I may still be working 3 to 5 years from now so… Would it make sense to have availed of the product in my situation?

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   Tyrone Reply:
   January 8th, 2010 at 8:29 pm

   Hi Tim, that’s exactly a variable life insurance product. The “savings” component takes the form of a mutual fund.

   I would suggest that “YES”, it is advisable for you to avail it. Just be sure you are buying it from a reputable and financially strong insurance company.

   The insurance form will protect your dependents (wife and kid) and the savings form can be used for future like education of your kid, etc.

   I would advise just in case you availed to ask the insurance agent as to what’s the percentage of the premium that goes to the “insurance” and “savings” form of the product. I think for you, since you are young, the better choice would be higher on savings than on insurance. I hope this helps.

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4. dlysen
   January 8th, 2010 at 8:18 pm

   It’s like an invisible body guard, you pay for something that will make you feel protected but it realy protect the beneficiary after you.

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5. Mighty
   January 9th, 2010 at 6:39 am

   Hey Tyrone, I think I might have signed up for this kind of insurance, which will take me 5 years to pay. At least I also get some payoffs after some time. I think this is a better deal than just let my money sit in a bank earning very very meager interest.

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6. Annette
   January 10th, 2010 at 6:09 pm

   Having no dependents, I did not think I would need insurance. I thought it only offers death benefits with tiny living benefits called dividends. I learned that what I only knew was the traditional life insurance.

   I recently got a variable life insurance not just for protection in case of demise or disability but for critical illness as well. It’s great if I don’t die or get sick soon and even more wonderful because there’s money for me with the plan also acting as an investment.

   Yes, initially, only a certain percentage of the premium is allocated to buy units of investments, but after about 2 years of paying, 100% of my premiums will be allocated to buy investment units. I can also specify the percentage of premiums that will go to bond funds, managed, growth, or equity funds. I chose equity funds (stocks) because of greater potential rewards and am in it for the long term. I can also redirect premiums from equity to bond fund, for example, or vice versa. It IS variable, lots of flexibility, unlike traditional plans and without the minimum investment amounts as with UITFs. Premiums can be as low as 1,000 pesos a month.

   Yes, you can ask your insurance agent about it. Just make sure he or she is licensed to sell and familiar with variable plans, not just traditional life.

   Dying young or living to old age, we need money in both cases. I think life insurance is the only product that you should buy when you don’t need it because you can’t buy it when you already need it.

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7. Ella
   January 13th, 2010 at 3:56 pm

   Hi, me and my husband we’re offered a VUL. The benefits sounds good. We’re informed that 3% of the investment will go to insurance premium. Is this already acceptable?

   a. lock-in period is 10y
   b. one time payment but can do top-up.

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   Annette Reply:
   January 16th, 2010 at 3:05 am

   i didn’t know VUL has a lock-in period. you can’t touch fund value for 10 yrs? or is this payable for 10 yrs or just single-pay VUL? got confused there.

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8. Mike
   January 16th, 2010 at 7:34 am

   Never buy a Variable Life Insurance.

   You can always invest the premium you are paying in a better yielding investment.

   The insurance company makes money by profiting from the spread. For instance, they might offer you an ROI of 3% but that they invest your premium that has an ROI of 7%. The difference of 4% yield is their profit, risk-free.

   Invest in Term-Life and use the premium to pay off debt. The avg. ROI on debt is 15%, which is far superior to the Variable Life insurance ROI.

   If you are debt-free, you are doing something wrong. You are not leveraging your money.

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   ako ito Reply:
   January 17th, 2010 at 1:32 am

   Life is not all about money. That is why variable life exists. You know you need a whole life insurance, but at the same time you kinda like to earn better yields as well. Hence enters variable life. Bow!

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9. Annette
   January 17th, 2010 at 1:53 pm

   If you know a better-yielding investment than what the insurance co. offers, invest there and just get term-life insurance which is cheap with high protection.

   If not, you can get a variable plan where the insurance co. protects your life and you can also get better yields than just parking your money ’safely’ in the bank.

   Different plans for different people.

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10. ako ito
    January 19th, 2010 at 11:49 pm

    Term life is not an investment, it’s actually an expense. Yes, there are specific people who need term life, but generally, term life is payable yearly til around age 65 or 70. If the insured person dies at age 71, then the “sum insured” will not be given to the beneficiaries.

    Traditional whole life and variable life covers til the age of 100.

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