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Sun Maxilink Prime: 3 Reasons Why My OFW Clients Get a VUL as Their First Life Insurance + Investment Policy

VUL products (like Sun Maxilink Prime) are popular among my OFW clients.  You see,  Sun Maxilink Prime is a Variable Universal Life (V...

Sun Maxilink Prime: 3 Reasons Why My OFW Clients Get a VUL as Their First Life Insurance + Investment Policy


Monday, February 29, 2016
VUL products (like Sun Maxilink Prime) are popular among my OFW clients. 

You see, Sun Maxilink Prime is a Variable Universal Life (VUL) plan which combines both life insurance and investment components. 

It allows you to insure your income so your family gets something if something happens to you.

And, it also allows you to invest indirectly in the stock market. 

Ibig sabihin, kapag tinawag na tayo agad ni Lord, at least may makukuhang lump sum ang pamilya mo para tuloy pa din ang pag-aalaga mo sa kanila kahit wala ka na. 

At the same time, since your money is invested, kapag ikaw ay pinalad na mabuhay ng matagal, mayroon ka pa ding matatanggap na pera na pwede mong gamitin habang retired ka na. 

Why do OFW clients like VUL solutions such as Sun Maxilink Prime even though some "financial experts" tell you to you separate life insurance from investments instead? 




It's because of this: 



You and I live in the real world. And in the real world, ideal financial advice doesn't work on everyone. 


In the ideal world of finance, we think it's so easy to just follow financial advice. 

Don't buy Starbucks!

Save 20% of your income!

Separate life insurance from investment!  

What we don't realize is that in the real world, what we think is ideal and what we actually encounter aren't the same thing. 

If you have a budget, you're living below your means, you're protecting yourself, investing for the future and have enough to give back, I won't think you're a bad person if you buy Starbucks and cut down mercilessly on your other expenses. 

If you're just starting out and you can only save 5% of your income for now, that's still great! 5% is better than nothing, diba? You can just increase that gradually. What's important is the habit of saving. 

And if you're more comfortable combining your protection and investment, no problem. What works for others may not work for you. 

It's still better than no protection and no investment, don't you think?





Why is a VUL like Sun Maxilink Prime a good option for OFWs: 

VULs help OFWs secure their financial future because VUL is a:

1. One Product = Two Solutions 

When OFWs get a VUL, they are answering two questions: 

a. Paano kung mawala ako ng maaga? VUL will give your family a lump sum benefit that they can use. Alaga sila kahit wala ka na. 

b. Paano kung gusto kong paghandaan ang college fund ng anak ko/retirement ko in 10 years? VUL is invested. Meron itong living benefit na pwede mong gamitin pagkatapos ng ilang taon. 

Whenever I ask OFWs why they want to protect their income or why they want to invest, they always say this: 

- Gusto ko ng magandang bahay. 

- Sana magkaroon ako ng kotse balang araw. 

- Ayoko mag-abroad habang buhay. Gusto ko 5-6 years lang ako mawalay sa pamilya ko kaya nagiinvest na ako ngayon. 

- I want my child to go to a good school. 

If you just get pure life insurance, your family will only benefit if you die. 




If you just get pure investment, you & your family will benefit if you're still alive. If you die, pahirapan pa sa pag-withdraw/redeem because there you have a responsibility to file and pay estate taxes. 

With VUL, you get two benefits. Since it is an insurance bundled with an investment with scheme similar to how Mutual Fund or UITF works, you protect your income (and provide for your loved ones) and invest for your future at the same time. 

(READ: 3 Things You Didn't Know Life Insurance Can Do To Save You Money (and your family's lives!)


2. Forced investing mechanism that promotes good financial habits 


Guess who? :) 
My father is an OFW. 

And just like other OFWs, he has a lot of financial responsibilities. 

My papa also has two financial accounts: he has a mutual fund account and a VUL account. 

When I was still a student, my papa needed to budget for: 

- car payments;
- condo unit payments; 
- land payments; 
- education of his children; 
- his and my mama's retirement fund (they don't want to work forever); 
- SSS contributions; 
pasalubong fund for extended relatives such as chocolates, liquor, perfume, make-up, T-shirt...
tulong sa pamilya fund;
pagkain ng baka/baboy; 
- travel fund;
- gadgets...and many more! 

He is a senior engineer. As such, he always has to: 

- attend meetings regularly; 
- supervise/oversee electrical plans;
- travel extensively for work; etc. 

And as a father, he has the responsibility to: 

- cook undercooked fish for my birthday :) 
- make sure that our grades in school are okay; 
- make sure that mama doesn't suffer from migrain because of us...
- raise us as loving, kind and generous children of God.

Doon sa VUL at sa mutual fund account ni papa, ano kaya ang mas napondohan ng investment? 


Obviously, his VUL account had more deposits/investments compared to his mutual fund account. 

Why?

Sa dami ng inaasikaso ng mga OFW, wala na silang panahon pa para mag-deposit sa bank, mag-fill ng form at mag-order ng subsequent investment for mutual funds. 

Usually, since there's no "forced" element in mutual funds, the subsequent investment would be whenever you feel like investing. “Kung kelan mo lang ulit feel/naalala na gusto mo mag-invest.”

The beauty with VULs is that you're "forced" to invest, or else, your insurance coverage will lapse. 

How can you ensure that you're investing regularly to your VUL account? You just automate it. 

You worked hard for this money - shouldn't your money do the same for you? 

Protect your family AND invest for the future with Sun Maxilink Prime. 



3. Wise Way to preserve your estate 


During your lifetime as OFW, you suffered from homesickness and you worked hard to provide for your family and also to get various assets such as houses, cars, business, properties, stocks, bank accounts, UITFs, mutual funds, etc. 

It's great if you have assets! Good for your family! 

All these assets form your ESTATE. 

If suddenly God calls you, what will happen to your estate? 

Pag nawala ka, madali lang ba ma-withdraw ng pamilya mo ang mga pinaghirapan mo? 

Will it be transferred to your family immediately? 

NO.


This is where “Estate Tax” will come into the picture. 

Estate tax – A tax on the transfer of the net estate of the person who passed away.

Meaning, for your family to access your assets (your whole wealth and your properties, etc) and transfer these to their names, they need to file and pay estate tax. 

Tax na naman? 

Yes. 

ESTATE will still be subject to ESTATE TAXES whether you make a will or not. 

How much? 

It depends on the amount of your net estate. 

The higher the value of your net estate, the higher amount your beneficiaries will be taxed.


Sample Computation for Estate Tax: 

If we get the total value of your real estate properties (land, house, condo unit) + business + vehicle/s you own + collectibles such as jewelry/paintings + bank savings account + stocks in COL + UITFs in banks + mutual funds, let's say we get the net estate of P12M. 

Your net estate = P15 million pesos. 

Based on the chart: 

First P10M = 1,215,000
Excess of P10M = P5M (20%) = 1,000,000
Total Estate Tax = 1,215,000 + 1,000,000
Total Estate Tax = P2,215,000

Para matransfer ang estate mo sa pamilya mo, kailangan muna nilang magbayad ng P2,215,000! 

Saan sila kukuha ng pambayad? 

All your money in your bank accounts, even in mutual funds, stock market, time deposits will all be frozen or cannot be withdrawn until estate tax is paid. 

What can be used to pay for estate tax? 

Life insurance proceeds. 

Life insurance proceeds will not be included anymore in the computation of the gross estate.

If something happens to you, your family can use the life insurance proceeds to pay the estate tax!

Sample Computation for Life Insurance: 

For 50 year old, male non-smoker to have life insurance coverage of P2,400,000, he only needs to pay P132,000 a year for 10 years! 

P132,000 x 10 years = P1,320,000 payment to get P2,400,000 coverage

Hindi pa natin naisama sa P2.4M coverage ang investment na kasama.

To give you an illustration, if you:

Die at age 55, you only paid P660,000, but your family gets P2.4M plus 499,642 (10% projection)

Die at age 62, you only paid P1,320,000, but your family gets P2.4M plus 1,862,812 (10% projection) 

Die at age 70, you only paid P1,320,000, but your family gets P2.4M plus 3,611,162  (10% projection) 

Now, do you get why most of my OFW clients love VULs? :)

If you don't remember the reason, just remember that VULs are OFWs: 

- One Product = Two Solutions
- Forced investing mechanism that promotes good financial habits
- Wise Way to preserve your estate 

What's the most popular Sun Life VUL that my clients consider? 

It's Sun Maxilink Prime


You worked hard for this money - shouldn't your money do the same for you? 

Protect your family AND invest for the future with Sun Maxilink Prime.