Why I will never Invest in Variable Life Insurances

UPDATE (4/24/2017) – It’s been exactly a year since I wrote this. Definitely, a lot has changed in the single year that has passed, especially how I look at life insurances in general. If you’d take a look at how I presented my opinion below, basically the gist was that I would never invest in Variable Life Insurances, or the kind of life insurance that comes with investments (through stocks or mutual funds). Simply because “insurance agents are only after my money”, and that “my current investments in stocks & mutual funds outperform those funds that are managed my insurance companies” (at the same time not really closing doors on this option).

My outlook has changed.

Just a few days ago I sat down with a friend (who’s also an insurance agent) to talk about life insurance and get the real deal on this. After 5 straight hours of talk at a nearby coffee shop, I’m happy to say that I am now seriously thinking of getting a life insurance that comes with an investment.

Why? Because:

  1. The benefits you get from insurance remain Tax free. No tax is paid to the government when you make a claim, get your retirement fund, or when your family makes a claim after the “you-know-what” (goodbye estate tax).
  2. Of course with life insurance, the payout is guaranteed and insured by the company.
  3. Best time to start is when you’re young and healthy. Not only It’s inexpensive.

Now I won’t be deleting below blog post and will let this tell us all a story instead. This will be very helpful especially for those who want to weigh their options right before committing to an insurance package.

Of course in the end, the choice will be all yours.



4/24/2016 – I’ve been bummed with the number of Sun Life Variable Variable Universal Life Insurance (VUL) proposals I got since last year from sneaky and VERY persistent referrals that I never met before, and up until recently, from a colleague of mine whom I’m not that close with but enough to crack a hilarious joke with and drink a bottle or two with. Of course they’d all mention “this is for your future”, as if they suddenly had that genuine concern about my uncertain horizon. They’d also occasionally throw-in some scare tactics like “what if you already have your own family and you suddenly die?” or something else that makes you feel a looming, dark future ahead of you and get you itching to close that deal.

At first I thought that hey, it would be good that I get myself and insurance because, well, this is the norm. Everybody should get life insurance to secure their future and lessen the risks of a gloomy future. I know I can afford it but there are other things I want to do with my money, like save some up in a bank for my emergency use, save a few for my future travels, and invest the rest in UITFs, forex, stocks and bonds.

Of course I get scared of my future and I want to secure it while I’m young. But when you’re young and earning, you tend to be more aggressive and earn more to secure your future and think of ways to achieve that. And I personally think a Variable Universal Life Insurance (VUL), which is a life insurance that comes with investment options that allows your money to grow, isn’t efficient enough to do that for me. Well for me, at least. And to keep my options open while I think if it’s just right that I get myself a VUL, I sometimes leave them hanging, waiting for that final moment that I’ll sign that precious contract of theirs. Am I bad? I think not. I think they’re worse, because they’re only after my money, and they know for themselves that my money will be better off invested somewhere else.

If I’ll be getting myself insurance anytime soon, I’ll be getting only the regular/term life insurance WITHOUT any investment attached to it. Why? Because:

  1. Variable Universal Life Insurances are much more expensive
  2. My current investment in UITF and the stock market way outperforms that of, in this case, Sun Life Financial.

BDO Equity Fund vs Sun Life Prosperity Philippine Equity Fund

In below screenshot I took from Bloomberg.com showing the performances of both for the last 5 years, it clearly shows that my investment with BDO Equity Fund clearly outperforms that of Sun Life Prosperity Philippine Equity Fund.

Bqo Equity Fund vs Sun Life Prosperity Philippine Equity Fund

Sun Life Prosperity Philippine Equity Fund vs my PSE Stock Market investments

Even when compared with my Philippine Stock Market (PSE) investments through COL Financial, Sun Life Prosperity Philippine Equity Fund continues to be at the bottom. Note that in below screenshot, these investment instruments all started at about the same rate in 2012.

PSE Stocks vs Sun Life Prosperity Philippine Equity Fund

My take on this

Having life insurance is a valuable asset for most, and I don’t disagree with that. In fact, I’m thinking of getting insurance some time in the future like individual/term insurances, and not the ones that come with investments, like VULs.

It is safe to say that past performances are good indicators of future performances, but of course, we can also never be sure of future performances. However, looking at the figures now, I’d rather top up on my existing investments and diversify by exploring new investments, or even new stocks or UITFs to invest on instead of investing my money in VUL life insurances.

In my examples above, I’ve only compared with Sun Life Prosperity Philippine Equity Fund. If you are looking at investing in Variable Universal Life Insurances that are offered not only by Sun Life but by other insurances as well, I encourage you to look at the past performances of your chosen investment instrument against other investments with your chosen insurance company by using Bloomberg.com’s quoting tool to help you identify which will match your life’s goals. After all, this will all depend on your and your family’s goals and needs.



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