Are you single and living the life? #YOLO!
A young independent professional living on his own.
Maybe you help pay mommy and daddy pay the bills for the cable and Internet but you know mommy and daddy can handle the bills themselves?
Have you been approached by a life insurance agent, financial advisor, or wealth planner about Life Insurance with Investment or VUL?
And told them you don’t need VUL yet?
They ask, “Why?”
And your answer is straight and simple: “I’m Single!”
Then they changed the topic and asked for referrals or maybe told you to please keep them in mind in the future?
They might agree that yes maybe you don’t need it yet.
You’re still in your 20’s or early 30’s.
And yes, you are single.
Why would you need life insurance?
But my answer is this: You Need Life Insurance!
Especially that you are single, independent, and living the life!
But before you click the “back button” or “x button”, let me explain briefly my Top 5 Reasons Why You Need To Have a VUL or Life Insurance. (I am here educate and not to sell).
Top 5 Reasons Why You Need to Have a Life Insurance or VUL
If you don’t know what is VUL, click this link.
What is a VUL?
Single Pay VUL or Mutual Fund/UITF?
I Already Have an Online Stock Trading Account, Do I Still Need a VUL?
Reason # 1: You Are Single and You Don’t Want to Be like Deadpool
You need Critical Illness Coverage unless you want to be like Deadpool.
What happened to Deadpool in the movie?
He was living the American Dream with his fiance.
However, he was diagnosed with cancer.
Unfortunately, he doesn’t have a VUL with critical illness coverage .
Hence, he can’t afford the treatment.
Hence, he needed to leave his fiance and be experimented which resulted to him looking like this:
(You may want to be like Deadpool but I know you don’t want to look like him.)
I can still remember what he said in the movie, “The problem with cancer is not how it hurts us but how it hurts the people we most love.”
One of the most common misconception of VUL or Life Insurance is that you need to die in order for your beneficiary to get the sum assured.
And because you are single, you don’t have kids or a spouse to designate as your beneficiaries (Unless you are a single mom or dad. In that case, you really need a VUL).
You may not have kids and a spouse yet but you can be your own beneficiary for critical illness coverage.
Critical Illness Coverage is a Life Insurance rider that is triggered when the insured is diagnosed with a critical illness such as cancer, stroke, and heart attack.
For a P3,000 per month premium, you can get covered up to P1-2Million (of course it depends on your age and health condition which is another reason why you need to get one while you are still young).
Meaning, the life insurance company will give the insured a lump sum amount so he or she can get the proper treatment and not be experimented like Deadpool.
Our company covers the following 36 Critical Illnesses:
In the Philippines, the cost of treatment is not cheap; a minimum of P1 Million is necessary to get the best doctors in the field.
You might have an HMO but it has a limit.
You may say that you have a lot of money to self-insure but why use all your money if someone can pay it for you by paying a low premium amount?
Or you may say that mommy and daddy are rich. But why be burden them? You are independent right?
Reason # 2: You Can’t Afford to Be Caught in an Accident Because You Are Not Deadpool
One cool power of Deadpool is that he can regenerate when he loses a part of his body.
So accident is never a problem with him.
If want to look like Deadpool and can find a hidden CIA lab to transform you into one, then you may not need VUL or Life Insurance.
But since most likely you don’t want to look like Deadpool or can’t find a secret laboratory, you definitely need a VUL with Disability Coverage
A Disability Coverage is a Life Insurance rider that is triggered if the insured can’t work continuously for 6 months due to an accident or critical illness.
If you get disabled, you might be able to take a leave for 1 month or 2 months max but what will happen on the 3rd-6th month?
A lot may happen in 6 months and you might no longer have a job when you come back.
Disability Insurance is there to be an income replacement so you can get the treatment you need and get back on your feet (literally and figuratively).
So for example, you are earning P50,000/month.
If you can’t work for 6 months, the total income you will lose is P300,000.
The company may give you P50,000 as your leave conversion or another P50,000-100,000 support.
But where will the remaining balance of P150,000-P200,000 come from?
We are just talking about your living expenses for 6 months.
How about the treatment and the months after next?
With VUL, for a premium of P3,000 per month, you can get as much as P2-3 Million disability coverage (again, depending on your age and health condition).
If we take out P1 Million for your treatment and rehab, you can use the other P1-2 Million to get back on your feet (maybe start a new business?).
Before I move to the next 3 Reasons, I am hoping that reason # 1 and #2 are already enough to make you decide that you need a VUL or Life Insurance Coverage. But just in case Deadpool is not enough, here is Reason #3.
Reason # 3: You Need to Have a Forced Savings and Investment Plan for Retirement
What? Retirement?!! 😱
You might say that “We are still young!”
I agree! And the best time to start funding your retirement is the moment you received your first paycheck.
Do you know the Retirement Statistics in the Philippines?
Yes! Only 2% can retire financially free!
Maybe the others have also thought that they were still too young a long time ago and when they realized that it’s already time to start, it was already too late.
But you may say that you are regularly saving.
That’s very good!
But have you experienced this scenario?
You save for 3 months, 6 months, or 1 year, and then something happened!
A FLASH SALE! 50% off! 75% off! Piso Fare! Once in a Lifetime Price Off!
And what happens next?
Your lifetime savings is wiped off!
That’s why it is important to have a separate plan for retirement.
A forced savings and investment plan that you won’t touch for flash sales.
A forced savings plan that is invested in financial instruments that gives higher return than your savings account.
And that is what VUL provides.
VUL provides protection from critical illness and disability at the same time protection against poor financial planning.
Since a VUL has an investment component, a portion of your premium is invested that earns depending on the fund where it is invested in.
And if you invest long-term, more often than not, it will provide spectacular higher returns than placing you money in the bank or under your pillow.
The Philippine Stock Exchange Index (PSEi) gives an average return of 10-12% every year.
Yes, the PSEi goes up and down! And there were losing years but if you invest long-term, you will surely win.
For example, in 2008, the PSEi ended at a losing year at 1,872 level.
But in year 2000, the PSEi was just at 1,479 level.
Now, as of July 31, 2018, the PSEi ended at 7,662 level (and we are in a down market).
Based on the example above, if you invest long term the probability to earn is higher than the probability to lose.
Hence, if you invested in 2000, you earned a return of 26.57% (in 2008) or 418.05% (in July 2018).
That’s investing for almost 20 years.
It might seem long but when will you retire?
Since we are millennials, we may say at 30 or 40 (10 to 20 years from now).
So if we want to retire early, we need to start funding our retirement fund as early as possible.
And VUL is one of the SOLUTIONS for that.
Reason # 4: You May Be Independent but How Are Your Dependents?
If you don’t have dependents, skip this portion and go straight to Reason # 5,
But if someone is depending on you, you definitely need life insurance.
Life insurance was primarily made to take care of your dependents when something bad happens to you.
Just let’s say you came from a typical Filipino Family wherein your parents worked very hard to give you the best education so you can find a good job and be set out for the rest of your life.
You love your parents so much and you decided to ask them to retire early and you will be the one to take care of them.
Or maybe not to retire but to help them in their bills so they don’t need to work as hard as before.
And maybe you have a younger sibling to take care of and you are now responsible for paying his or her tuition fees.
You are earning pretty good and you just send money to them.
Let’s say P10,000-P20,000 per month.
You are still young. You have a great job. You have money.
And you believe you don’t need Life Insurance or a VUL.
Unfortunately, life happens (Reason 1 or Reason 2).
Who will make sure that your family will be okay? You need money to get treated.
Who will pay the bills? Do they need to just eat 2x a day instead of 3x?
Does you sibling need to stop going to school for the moment?
But let’s say you didn’t make it.
(I know you don’t want to think about this. I don’t want to too. But that’s life. It’s unpredictable. What I do is make the unpredictability of life as easy to go through as possible.)
Where will they get P10,000-P20,000 per month for the next 5-10 years.
That’s a total of P600,000 to P2.4 Million.
Can mommy and daddy still go back to work? Or can they still work as hard as before?
That’s where Life Insurance or VUL comes in.
Just in case you don’t make it, for a premium of P3,000 per month, your family can receive a lumpsum amount of P1-3 Million so your dependents can be okay for the next 5 to 10 years.
Reason # 5: Mommy and Daddy Might Be Super Rich but You Don’t Want to Be Burden Right?
You are an independent young professional.
That’s why you are the living the life you are living now.
And when your time comes (and God unexpectedly called you), what happens?
Who will pay for the funeral?
(Sorry for being morbid but this is the reality of life. Again, it is my job to make things as easier as possible when these things happen).
Will it be mommy, daddy, or those who are near you?
As of now, the average cost of funeral is around P150,000-P200,000.
You can’t believe it?
Try searching the net for how much a funeral service and memorial lot cost and the figure above might be in the lower range.
But you may say, your company has benefits for this and your parents won’t mind to pay P150,000-P200,000.
But wouldn’t it be great to leave a gift for them?
They might have spend millions raising you and no one can quantify or repay their love and care.
But even if they don’t need the money, wouldn’t it touch them that you made your parents your beneficiaries of your Life Insurance with a coverage of P3 Million.
And in that policy, you attached a letter thanking them for all the love, care, and support and asking them to use that P3 Million to splurge and travel the world, continue making memories , and reminding them that you will always be inside their hearts.
Wouldn’t that be sweet
Hopefully, you get my point.
And I am sorry if it is a little morbid.
To end sweetly…
We are young and independent. And money might not be our top priority.
But hopefully through these 5 reasons, I was able to enlighten you why you need Life Insurance or VUL even if you are young and single:
# 1: You Are Single and You Don’t Want to Be like Deadpool
# 2: You Can’t Afford to Be Caught in an Accident Because You Are Not Deadpool
# 3: You Need to Have a Forced Savings and Investment Plan for Retirement
# 4: You May Be Independent but How Are Your Dependents?
# 5: Mommy and Daddy Might Be Super Rich but You Don’t Want to Be Burden Right?
Always remember, that Protection, Savings, and Investment come hand in hand.
If you want to have a sample plan for you, click this link and I will send a sample plan to your email: http://bit.ly/CCFinancialNeedsAnalysis
Your Millennial Wealth Planner,
Harold Q. Gardon, CWP, CEPP
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