Variable Unit Linked - Why do You need one?

Few years back, people can only hear about savings or insurance or investments. Until such time, that all these services meets at one certain point and gave birth to a program called Variable Unit Linked or Investment Linked Insurance.

It's a good thing that in 1996, Pru Life UK (Pru Life UK Official Web Page) pioneered the Variable Unit Linked program where both insurance, savings and investments can be offered to us - Pinoy.

VUL is designed for medium to long term goals. According to studies only a small percentage in the Philippines is insured so what will happen to the large chunk of the population when they get sick or die prematurely? Don't they love their families too?

On Protection

Let me refer you to the illustration below (Taken from  Pru Life UK Official Facebook Page)

What will happen if these will happen to any of us? We don't know what tomorrow brings to us and our family and it is always best to become even more vigilant on preparing for the future most especially if you have dependents. These are the things a Filipino doesn't know anything about (or just not aware of). Is it because of our culture? that probably we expect to be dependent on our relatives when it comes to money or sickness? or is it because we can just say "bahala na" ?

Have we not thought about those who depend on us? Do we  like to leave them debts (utang) when we die? or when we are hit by a critical illness? Imagine how every 1 in 6 Pinoy is hit by stroke and there is only an interval of 2 seconds? who are the people you are thinking of now? the faces of your family members that flashes before you?

On Investment and Savings

Einstein said that the eighth wonder of the world is compound interest.

That is true because given the "time", there is so much we can do with our money. Given that age is the same (24 years old) , and you invested your money with different fund instruments - bank, mutual funds, stock market, variable unit linked product and real estate, there are opportunities to double your money several times in your lifetime!

Another factor that will matter is the time you decided to save. See illustration below:

With Mr. Early Saver, though he saved only in 5 years with a total of P 600,000, his total returns by the end of 20 years is around P 4 Million! While Mr. Late Saver he has to save for 15 years just to get the same amount. But here is the thing, at this point in time, regardless whether you are the early or late saver, it's important to save and be determined to change your financial life!

Now why VUL and why do we need one? In a variable unit linked product you will have the following:

1. Protection plans that will cover your emergency needs such as critical illnesses, disability, hospitalization
    and accident.

2. Savings - You will also have the opportunity to discipline yourself to save for retirement and other major
    purchases

3. Investment - a VUL product can give you the opportunity to invest in the stock market and as well as in bonds or combination of the two.

Simply put:

*This is an example of a VUL product for a 30 yr old male, who is saving P 5,000 every month. 

I hope that this article, again, enlightened you on what is available in the market. Should you need assistance on VUL and if you think this is something that matches your need in terms of investment and protection, don't hesitate to email me or leave a comment below with your email address.

Happy investing!

Jendee S. Sapo, RFP
Chartered Trust and Estate Planner Graduate (CTEP)
jendeesapo@gmail.com

Tips on Saving and Budgeting

So this is the first of the articles I am going to write for Pera Pera Lang Pinoy (PPLP). 

 Today, I would like to share with you ideas on saving and budgeting. In fact, there are a lot of tips available in the internet, but let's just focus on two things: 

1. Reduce your expenses 
2. Increase your income 

 Those two are the facets of successful savings also. If you think kulang ang kinikita mo, might as well, write down all the expenses you make every day and prioritize. Make a budget, kung ano lang muna ang importante iyon muna ang bilin. E pano naman kung lahat importante? That's the time you increase your income. Ibig sabihin lang is that kulang talaga ang monthly income mo. 

 In terms of increasing your income and reducing your expenses, there are a lot of things you can do: 

1. Earn from you skill/talent (Baking, Graphic arts or multimedia, tutoring, singing,online job, MLM etc) 
2. Sell stuff you don't need (Pwede kang mag garage sale) 
3. Bring your baon (either going to school or work)
 4. Bring your own coffee (kung kaya naman di bumili ng mamahalin na kape, bring your own,healthy na brewed pa!) 
5. Discipline - Wag nang bilin ang mga bagay na di naman talaga kailangan o pagkagastusan, o kaya naman ay makakapag hintay, ito ang tinatawag na delayed gratification :) 

 Below are some tips from Pru Life UK on how to loose some pounds!

Hope that this article was able to give you ideas on financial planning. :) happy sunday!