Author Topic: VUL vs. Mutual Funds and UITF (Read 27868 times)

lhizzy · « **Reply #90 on:** Nov 22, 2011, 06:57 PM »

Since everyone would like long term investment and MF is most probably the best investment vehicle you can use, then choose the top 3 Mutual Funds company. You can see their performances at www.pifa.com.ph. Among the top 3 are FAMI, PAMI and PEMI.

WealthyInvesting · « **Reply #91 on:** Jul 01, 2012, 12:00 PM »

Do UITFs impose a 20% Final Tax on Interest vs a Mutual Fund who is Tax Leveraged?

drecstimes · « **Reply #92 on:** Jul 01, 2012, 12:50 PM »

^ NAVPU is net, meaning bayad n tax nyan .. worry nothing but the management fee, custody fee, and penalty on holding period if kinuha mo ng maaga

HTH

mxherr5 · « **Reply #93 on:** Jul 01, 2012, 09:19 PM »

@Wealthy,

Are you talking about tax on a 5 year deposit product?
I asked BDO and they said they still pay a tax, the tax free
provision only applies for individuals and corporations.

A mutual fund, as a corporation would be able to claim the
tax exception though.

But at anyrate, like drec says, the NAV is net of all charges

joshlegaspi · « **Reply #94 on:** Jul 02, 2012, 08:14 AM »

i was part of insurance industry and im very much familiar with the VUL products.. sorry guys, pero the moment na this product was being taught during my training, napansin ko na that it seemed not wise to invest on this type of product..

And I was surprised and vidicated that upon my research, other financial gurus are actually advocating just taking a TERM LIFE INSURANCE and to avoid by all means the Variable Life or even the Whole Life. Google on Suze Orman, David Bach and even our very own Colayco and Bo Sanchez's views on Life Insurance - they are all in agreement that life insurance is very important - but only for protection - never combine it with investment.

Their advice are all pretty much the same: Just take a term insurance (up to the face value of the actual amount you really need) and invest the rest directly to a mutual fund.

Mostly mga life insurance agents lang (so called financial planners) ang nag-addvice to take VUL. Most of the well known and "real" financial planners are really against VULs.

kithe · « **Reply #95 on:** Jul 02, 2012, 11:47 AM »

Well, kung investment naman talaga ang gusto mo, may stocks, uitf, MF, etc..

VUL is for long term, di siya investment na kaagad agad ang return mo. There's an advantage in VUL than term only..

If there's a client who wants Term insurance only, that's fine too..

mxherr5 · « **Reply #96 on:** Jul 05, 2012, 12:16 PM »

Quote from: kithe on Jul 02, 2012, 11:47 AM

Well, kung investment naman talaga ang gusto mo, may stocks, uitf, MF, etc..

VUL is for long term, di siya investment na kaagad agad ang return mo. There's an advantage in VUL than term only..

If there's a client who wants Term insurance only, that's fine too..

What is VUL's advantage over term+MF/UITF/WhateverInvestment?

Is it cost?
You probably have access to the VUL's internal cost of insurance
table.

Which is more expensive for say an age 65 man?
The VUL's COI for that year?
or a 1yr Term insurance?

Seriously, I'm curious =D

bauer · « **Reply #97 on:** Jul 05, 2012, 12:20 PM »

I dont see any advantage from VUL that is different from other traditional types of insurances and investments.

kithe · « **Reply #98 on:** Jul 05, 2012, 02:49 PM »

VUL is a term insurance linked with investment.. It is not consider an investment for short term goal.. it has charges like premium charge, monthly periodic charge and insurance charge.

If you want an insurance plan and savings in one, then VUL is a good plan..

It is cheaper than traditional plans and the value of the fund has the opportunity to grow kasi nga may investment component siya. (mutual fund) pero if you want guaranteed, okay din ang traditional plans.

Sa VUL, you can withdraw money from your policy, if the need arises sa traditonal plans either you surrender or loan from your policy..

Kung gusto mo na term insurance lang and then mf for investment, pwedi rin yun.. Kaso every year tumataas ang premium sa term insurance.. Pag nakalimutan mo pa i renew, tapos namatay ka, wala makukuha beneficiary mo, sa VUL kung nakabayad ka na at least 3 years at nakalimutan mo magbayad, the policy will not lapse kasi may fund value na natitira sa policy mo na duon na lang kukunin monthly yung para sa insurance charge mo..

VUL is an insurance plan for long term, like retirement. Do not compare it sa pure investment like MF, UITF, SDA, etc. with regards sa return.

Magkaiba sila ng purpose na magagawa sa buhay mo at ng pamilya mo..

bauer · « **Reply #99 on:** Jul 05, 2012, 03:30 PM »

Quote from: kithe on Jul 05, 2012, 02:49 PM

It is cheaper than traditional plans

I doubt if it is true. Can you give me the price of VUL payment for 1 million pesos cover for age 35?

Can you also give me a whole life insurance payment for 1 million pesos cover for age 35?

Let's compare the cash out and tell me which one is cheaper.

Post Merge: Jul 05, 2012, 03:32 PM

Quote from: kithe on Jul 05, 2012, 02:49 PM

Sa VUL, you can withdraw money from your policy, if the need arises sa traditonal plans either you surrender or loan from your policy..

If you will make a partial withdrawal sa VUL, the same pa rin ba ang insurance protection mo? the same pa rin ba ang potential income earnings sa remaining balance ng VUL fund mo?

Post Merge: Jul 05, 2012, 03:36 PM

Quote from: kithe on Jul 05, 2012, 02:49 PM

VUL is an insurance plan for long term, like retirement. Do not compare it sa pure investment like MF, UITF, SDA, etc. with regards sa return.

Magkaiba sila ng purpose na magagawa sa buhay mo at ng pamilya mo..

Talaga VUL lang ang long term (retirement)? Hindi pwedeng pang long term ang MF? UITF? SDA?
Bakit hindi pwede compare silang lahat sa returns? eh lahat naman yan investment, iba-iba lang ang pangalan, paraan ng pagkita, at legal framework, and of course risk reward ratio.

Ano ang purpose ng VUL sa pamilya ng isang pilipino na IBA sa purpose ng MF,UITF,SDA, etc.?

george88 · « **Reply #100 on:** Jul 05, 2012, 04:34 PM »

Hay salamat sakto usapang VUL...until now hindi ko pa rin naiintindihan ang pinasok kong so called "investment" na ito...

Wala sa loob ko ang pagkuha nito dahil isa ito sa mga sumira ng plano ko last year

As Real financial Gurus advise do not invest unless you havea savings of at least 6x of your monthly expenses or earnings

Hindi ko alam kung paano ako nahook sa product na ito probably because of the return and the projected income na nakita ko sa chart with matching Rule of 72 by Einstein...

Kung nagsisi ba ako kumuha ako ng product na ito its a big YES because I can double the money I invested in here when I use it as additional capital to my buy and sell sideline.

It was too late when I study, do research and calculation na parang nagipon lang ako ng pera with a few bucks of interest kung magiging consistent ang performance ng investment mo else para kang bumili ng isang stock at hindi nagperform or bumaba pa ang price share...

It was too late na dapat Term life insurance lang ang kunin ko then invest the rest in mutual funds, stock market, real estate, etc etc...

This VUL is only good to the newbie people in the investment world and fitted to most of the average Filipino who just want to work and no time for mutual funds and stock market analysis but again there is no guarantee of return because it depends on the performance of the investment...

Now im in the brink of a decision making whether I continue it or cancel it and let the money eat by the annual premium charges.

I know I will loss a huge money if I cancel but its ok I already loss money in different venture much bigger than this so called "investment"

I hope someone could help me decide...

mxherr5 · « **Reply #101 on:** Jul 06, 2012, 10:54 AM »

@george, whose VUL is that? Kung nabulag ka sir sa returns
baka pinakita sayo 6ang 20% returns or higher?

There's a reason why the policy illustration only goes up to
10% I guess =D

Pero nabulag rin ako sa "potential" returns dati dahil sa software
ng isang agent ng xxxxxxlife lol. Ang official illustration ay
up to 10% lang pero may iba syang illustration na pinakita na
20% and up ang returns. Whew! ang laki ng potential kita haha

But If I were in your shoes sir, I would keep it. You probably
already shelled out money which would have been eaten up by
premium charges.

Really, its just like buying term and investing the rest.. yun
nga lang. You have no choice but to invest the rest in the insurance
company's VUL. Plus most VULs have loyalty bonuses.

Pampalubag loob somehow =D

@ kithe, so basically the advantage of VUL over term is its convenience
then?

Quote from: kithe on Jul 05, 2012, 02:49 PM

Kung gusto mo na term insurance lang and then mf for investment, pwedi rin yun.. Kaso every year tumataas ang premium sa term insurance..

I'm not sure if you've missed my earlier statement but don't you think that's an inappropriate statement to make?

VULs have internal cost of insurance charges, which is the equivalent term insurance in a BTID(Buy Term Invest the Difference)

Remember a VUL is
VUL = Term + Investment

And the VUL's internal cost of insurance also go up
every year.

Were you able to check your software to see if the
term insurance is more expensive compared to a VUL's
internal cost of insurance charge?

pilgrimpanda · « **Reply #102 on:** Jul 06, 2012, 11:39 AM »

^Sir mixherr5, tanong ko lang, magkano yung loyalty bonuses? Significant ba?

@george, kung ako din sayo sir, I would just keep it. Ilang years na ba kayo nagbabayad? In some investments, in 9 or 10 years may kita na kayo, so sayang naman if you pull out now. Just my two cents.

george88 · « **Reply #103 on:** Jul 06, 2012, 02:22 PM »

@mxherr

worst daw kasi 4% now at is best nasa 15%...nsa equity fund ang investment nya what if I put it on balanced fund on its 8 year just to play safe...=)

@pilgrim

thanks for advise...

joshlegaspi · « **Reply #104 on:** Jul 06, 2012, 06:40 PM »

george88> yes, VUL is not a wise investment. Even if you read the advice of current popular finance experts (Orman, Bach, Colayco, B. Sanchez), they do not recommend VULs. Yun palang should sound an alarm as the financial experts themselves discourage VULs.

Buti nalang the stock market is doing well now, kaya kahit papano maganda takbo ng VULs ngayon.. on second thought, since you mentioned your VUL is invested entirely in an equity fund - then you should at least be earning now? Lugi pa rin ba even if the stock market now is in all time high?