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It is true that variable unit-linked life insurance or VUL is a little bit expensive compared to traditional life insurance.
It's primarily due to its added investment feature that allows you to accumulate money over time through stocks and bonds.
This feature of VUL adds more value to you.
Despite being a bit costly in general, VUL can come with a minimum investment that an average employed Filipino can afford.
In this post, I am going to talk about the Pru Life UK minimum investment for VUL insurance.
Pru Life UK Minimum Investment for VUL
The minimum investment for Pru Life UK VUL Insurance is 15,000 pesos annually or 1,250 pesos per month. This pertains to the minimum required investment for the product PRULink Assurance Account Plus.
Although the lowest premium investment across the VUL variants of Pru Life UK is 1,250 pesos per month, the insurance company may ask for a higher premium depending on different factors.
Different Factors Affecting the Price of Your VUL
- Your Age
- Your Medical Condition
- The Amount of Insurance Coverage
- The Riders Attached to Your Policy
I divided these factors into two categories which are the “controllable” and “uncontrollable” factors.
Controllable Factors
- The Amount of Insurance Coverage
- The Riders Attached to Your Policy
Uncontrollable Factors
- Your Age
- Your Medical Condition
Controllable Factors
These are the things that you have full control of.
You can set these up depending on your needs, preference, and budget. It will add costs to your VUL policy when you incorporate more of these in your policy.
On the other hand, having less of it in your policy means lesser cost.
Just be sure not to compromise your coverage in exchange for a lower cost.
Amount of Insurance Coverage
Insurance works in a way that you are given life coverage in exchange of paying an insurance premium.
The higher the coverage means a higher premium, in general.
The amount of insurance coverage you want to have in your VUL policy directly affects the premium you need to pay.
Therefore, if you want to pay at the lowest possible amount, you need to consider having coverage that is not too high so that it will not result in a higher cost.
There are four components of Insurance Coverage in Pru Life UK.
These are the “basic coverage” of a VUL insurance policy. You cannot have a Pru Life UK VUL without one of these.
- Sum Assured
- Accidental Death and Disablement Cover
- Total and Permanent Disability Cover
- Critical Illness Coverage
Sum Assured
This is simply the life coverage on your VUL insurance policy. This is the amount that your beneficiaries will received when you passed away.
Accidental Death and Disablement Cover
If the insured suffered death due to accident, the whole amount of this coverage is to be received by the beneficiaries on top of the Sum Assured. If the insured suffered disablement, Pru Life UK will pay full or portion of this coverage depending on the degree of disablement (not total and permanent disablement).
Total and Permanent Disability Cover
Pru Life UK is going to pay for the amount of this cover if the insured suffered from total and permanent disability. The disability is said to be permanent if it is beyond the hope of recovery with the current medical technology.
Critical Illness Cover
This is the amount that Pru Life UK will pay if the insured is diagnosed with any of these critical illnesses.
Riders Attached To Your Policy
Riders are optional benefits that you can attach to your policy. You may opt not to include any of it in your VUL. In other words, you have full control over these benefits. You may or may not have it in your policy.
Riders come with added costs.
Therefore, I do not recommend that you get one if you have a tight budget. Having the insurance itself or the “basic benefits” is enough.
And anyway when your financial status goes well in the future, you may add these riders eventually at any point in time.
These are a few examples of Pru Life UK VUL Riders
- Waiver of Premium on Total and Permanent Disability
- Hospital Income Rider
- Payor Waiver
Waiver of Premium on Total and Permanent Disability
This rider waives all future premium payments if the insured suffered from total and permanent disability.
Hospital Income Rider
If the insured is hospitalized due to injury or illness, Pru Life UK will pay for the amount stated in the VUL insurance policy.
Payor Waiver
If the payor of the VUL policy dies or suffers total and permanent disability, Pru Life UK waives all future premium payments on the policy. Hence, if the father of the life insured who pays for the premium of VUL dies, all subsequent premium payments will be waived. The insured is not required to pay for the premium on behalf of his deceased father.
Uncontrollable Factors
Your age and your medical condition have a big impact on the amount of investment you need to make to get a VUL.
It is due to the very nature of insurance itself.
Insurance is taking away the risks of your life in exchange for money. So the more risks they will get from you, the more money you will have to invest.
Those risks on your life (except for external factors such as an accident) are mainly determined by your health and age.
Your Age
The minimum investment for Pru Life UK VUL insurance is 1,250 per month.
But it may not be the case for a 65 years old individual.
The more you age, the more cost you will have to pay to apply for a VUL. That is why you often hear financial advisors say that you have to get your insurance early on.
Time is really a big factor here.
To save cost, I suggest that if you have a plan to apply for insurance you better not delay it any further.
Your Medical Condition
So many VUL insurance applications have been rejected because of pre-existing medical conditions.
But sometimes Pru Life UK does not reject the application at all. It depends on the underwriters if they think that you can still be insured even though you have a certain medical issue.
But it will add up cost as always.
Your application will be accepted for an added premium. This added premium is to compensate for the risks that are associated with your medical condition.
I remember so many people telling me that they don’t need insurance because they are still young and healthy. And the irony is that when their health deteriorates, they may not get insured anymore.
How about the maximum amount of investment? Is there any limit?
There is no limit on how much you may invest in your Pru Life UK VUL insurance policy. You have full control if you want to have a higher premium.
Maybe you want to increase your coverage. Or you want to increase your premium so that you can accumulate more return in the investment portion of your VUL.
Can You Ask To Increase Your Premium Anytime?
Yes, you may opt to increase your premium anytime.
Maybe for now you can only afford to save 2,000 pesos per month for your VUL, but you can increase this anytime in the future when your financial status improves.
You just need to talk to your financial advisor regarding it.
Changing the amount of insurance premium or any other details of your VUL insurance can be accomplished by way of amendment of policy.
Final Thoughts
Compared to traditional life insurance, VUL comes with a slightly higher cost. It’s because of its added feature that enables you to invest in stocks and bonds.
Higher cost does not mean that VUL is not affordable to a common employed Filipino.
You can apply for a Pru Life UK VUL at a minimum investment amount of 1,250 pesos per month subject to different factors that I stated above. You can increase your premium if your financial status permits you to do so anytime in the future.
To save costs, you have to consider your age and your medical condition. These are the things you have to outrun.
Time is of the essence.
The more you age the more it will cost you to have insurance. And when you already have health problems, you might not get that VUL anymore.
Don’t wait for those things to happen.
So if you are planning to apply for a VUL insurance, do it now.
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