Purchasing life insurance these days is more like purchasing cell phones. There are a number of insurance companies to choose from and each offer a range of insurance products. You may have more than one if you feel like it.
There is one product in particular that seems to have gained popularity in the recent times. It is especially popular with the young adults who belong to the middle income groups. This is a type of insurance plan, which is a combination of mutual fund like investment while offering protection as well. This is called the variable life insurance. Here, the premiums as well as death benefits are very flexible. The cash value of the product will depend on the performance of these funds, state insurers.
In the traditional plans, cash values, premiums, and death benefits are all fixed and the insurance companies decide where the premiums need to be invested.
However, of late there has been a shift in the market preference and it is leaning more towards variable life, states Josephine Torrijos. She has been a part of the life insurance business for over 3 decades now.
Torrijos also added that when she offered customers the traditional plans, they actually preferred the variable life insurance instead. She is the agency sales director, at Cocolife. She also added that she realized that those who preferred Variable Life Insurance were between ages 25 and 45. This is segment of young professionals who probably have the exposure of personal finance seminars.
Those who purchase variable life insurance find the prospects of benefitting from an upswing in financial markets very appealing and are attracted to the flexibility aspect as well. As per the website of Philippine Life Insurance Association, with traditional policies, the death benefit will be limited to the amount that is specified in the policy. However, with variable life insurance, the death benefit is inclusive of the face amount as well as the buildup of cash value. Hence, the policyholders may increase their coverage as well as the investments by paying an additional sum.
Pearl Bantillo, who is a Singapore-based journalist, stated that she purchased variable life insurance when she went on a trip to Manila, as she wanted to add to the rest of the insurance plans she already had. She looks at it only as an investment, where she does not have to do a thing, but her money will still earn something in the future.
