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Insurance is a term used to refer to an action, system, or business where financial protection (or financial compensation) for the soul, property, health and so forth get a replacement from unpredictable events that can occur such as death, loss , damage or illness, which involves paying premiums regularly within a certain period of time instead of a policy that guarantees such protection.




The term “insured” usually refers to everything that gets protection.

Basic Insurance Principles

In the insurance world there are 6 basic principles that must be met, namely:

• Insurable interest, namely the right to insure, arising from a financial relationship, between the insured and the insured and legally recognized.

• Utmost good faith, which is an action to disclose accurately and completely, all material (material fact) facts about something that will be insured whether requested or not. The meaning is: the insurer must honestly explain clearly everything about the extent of the terms / conditions of insurance and the insured must also provide clear and correct information on the object or interest insured.

• Proximate cause, which is an active, efficient cause that causes a chain of events that results in an effect without the intervention of one who starts and actively from new and independent sources.

• Indemnity, which is a mechanism by which the insurer provides financial compensation in an effort to place the insured in the financial position he had just before the loss occurred (KUHD article 252, 253 and affirmed in article 278).

• Subrogation, namely the transfer of claim rights from the insured to the insurer after the claim is paid.

• Contribution, which is the right of the guarantor to invite other guarantor who both bear, but do not have the same obligation to the insured to participate in providing indemnity.

Type of Insurance

1. Life Insurance

This type of insurance is known to provide financial benefits to the insured for his death. The payment system for this type of life insurance varies. There are insurance companies that provide payment after death and others can allow the insured to claim funds before his death.

Life insurance can be purchased for self-interest and on behalf of the insured alone or purchased for the benefit of a third person. Even life insurance is also known to be bought in other people’s lives. As an illustration, suppose a husband can buy life insurance that will provide benefits to him after the wife’s death. Parents can also insure themselves against the child’s death.

2. Health Insurance

This type of insurance is also quite well known by the people of Indonesia. Health insurance is an insurance product that handles the health problems of the insured because of an illness and covers the cost of the treatment process. Generally, the cause of the insured’s illness which can be borne by the insurance company is injury, disability, illness, until death due to accident.

Health insurance is also known to be bought for the benefit of the insured or the interests of a third person. Private health insurance companies such as Prudential, Allianz, AIA, Cigna, and Manulife are among the big names that provide a variety of insurance products to suit the needs of the Indonesian people and are widespread throughout the world.

3. Vehicle Insurance

The most popular vehicle insurance in Indonesia is a type of car insurance that focuses on injury coverage to other people or against damage to other people’s vehicles caused by the insured. This insurance can also pay for the loss or damage to the insured motor vehicle.

Vehicle insurance is one of the general insurance products. This type of insurance had become a boom when the riots broke out in May 1998 because the incident made people’s interest in protection ownership for private vehicles increase dramatically.

The financial site Cermati.com has partnered with well-known insurance companies in Indonesia so you as a customer can compare the best car insurance products with low rates.



4. Education insurance

Dizziness with children’s education costs? This type of insurance will help you overcome. Education insurance is the best alternative and a solution to ensure a better life, especially in children’s education assets. The cost of the premium that must be paid by the insured to the insurance company varies according to the level of education to be obtained later. Understanding the importance of using education insurance for children is now a matter of concern for parents. The high cost of education and other conditions that exacerbate the economy such as the weakening of our currency against the US dollar affect the cost of education for children later. Realizing that this clearly will burden parents, it is not uncommon for parents now to choose to have education insurance. So, education insurance can be classified as the types of priority insurance too, right? You will certainly be helped in taking care of the child’s future.

5. Travel insurance

Maybe for those of you who often travel or travel are familiar with this type of insurance. The various types of insurance also create a variety of protection for travelers. Overall, the function of travel insurance is not much different from the ordinary insurance function as a form of protection for customers with a short period of time that is for the premium buyer to travel until returning home. Benefits and protection that will be gained from having travel insurance include obtaining protection and coverage for accidents that affect premium buyers, personal accident benefits, dependents for emergency medical expenses, repatriation of bodies, medical evacuation, to protection of luggage that has a risk of being lost. or damaged.

6. Business insurance

For those of you who have a business field, this type of insurance is important to consider. In addition to the types of insurance that involve individual protection, insurance that protects businesses is also needed. Business insurance is a protection service against damage, loss and loss in a large amount that may occur in one’s business. This insurance provides compensation for damage caused by fire, explosion, earthquake, lightning, flood, hurricane, rain, collision, until riots. Insurance companies usually offer a variety of benefits from business insurance such as protection of employees as business assets, investment and business protection, comprehensive life insurance for all employees, to health insurance protection packages for employees.

Advantages of Insurance Companies

Insurance companies also benefit from investment. This is obtained from the investment premium received until they have to pay the claim. This money is called “float”
Insurers can get profit or loss from float price changes and also interest rates or dividends in float. In the United States, property losses and deaths recorded by insurance companies were US $ 142.3 billion in the five years ended 2003. But total profits in the same period were US $ 68.4 billion, as a result of the float.

Insurance Refusal

Some people consider insurance to be a form of betting that applies during the policy period. The insurance company bet that the buyer’s property will not be lost when the buyer pays the money. The difference in fees paid to insurance companies against the amount they can receive if an accident occurs is almost the same as if someone bet on horse racing (for example, 10 to 1). For this reason, some religious groups including the Amish avoid insurance and depend on the support received by their community when disaster occurs. In communities where close and supportive relationships where people can help each other to rebuild lost property, this plan can work. Most people cannot effectively support the system as above and this system will not work for big risks.






In this video, J3 talks about how VULs work, as well as their different types, to help you evaluate for yourself if they are good financial instruments for you.

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30 Replies to “Are VULs and Investment Linked Insurance Policies Good? | My Insurances Info”

  1. Hi J3, do u think i should stop my VUL? i already paid 2 years of it but i still have 8 years to go, and i realized it's not a good investment anymore bcoz i'm paying 25thousand every year and it's very costly for me to pay. but then i would lost half of my money or more if i'm going to stop it and withdraw my earnings from the investment portion of the funds..what do u think? will i just stop and learn from it or i will just continue it? your response will be greatly appreciated. Thanks in advance.

  2. Hi! It concerned me a lot after I watched this video. I own a VUL product and a policy holder of AXA Philippines. I beg to disagree how VUL is rated or categorized in this video as " pwede na " In my opinion I think you should not underestimate how VUL's are important to those who want to get it. Please do not create confusion and " misconception" First point: Why INSURANCE or LIFE INSURANCE? – Have you ever tried to analyze that INSURANCE or LIFE INSURANCE itself is also an investment???? WHY? because whether you are single or with a growing family the cost of insurance or the life insurance you have is more than enough in case of untimely passing. You become an asset to the family. The insurance component is a manifestation of love to those who are left behind. Second point: There's no such cheap or expensive INSURANCE. WHY? because it depends on the package(s) or the protection component you'll have with the Life Insurance company and " PEACE OF MIND " is never cheap nor expensive. You'd rather get PEACE OF MIND thru Life Insurance that an iPhone7 that will depreciate in time. Lastly, the INVESTMENT aspect you've discussed is somehow untrue. Why? because there are VUL products that as early as 3rd year all your premium payments goes to INVESTMENT 100%. I hope you'll make it clear nextime.

  3. SIr, if a person has a VUL product and then he dies, will he receive the insurance coverage and the value of his investments? or just one, either the 125% of the investment or the present value of the investment, whichever is higher?

  4. Bigla ako napaisip, kakuha ko lang kasi ng VUL last Feb. so quarterly ang bayad ko, 58k per annum na then incase may mangyari makakatanggap beneficiary ko ng 2.5million.. payable in 10 years.. Meron narin ako mutual fund sa Isang broker company, parang napaisip tuloy ako kung ituloy ko pa VUL ko o kumuha nalang ako ng term insurance,,hayaan ko nlang yung nabayad since kakaumpisa pa lang naman. any advise?

  5. Now I fully understand how my AXA vul works! Just 3 question lang po.
    If I ever na matapos ko ang 5 year term na kinuha ko, yung investment side lang ba ang makukuha ko, not the complete gross amount + roi ?
    Second, kung sakali ire-invest ko ulit ang complete amount na nag-mature for another 5 years, it will fall ba sa single pay vul?
    And lastly, kung i-pull out ko na ang maturity amount ko….continous pa bang covered ako ng insurance since fully paid na sya or wala na rin?
    I hope magkaroon ka ng time na makapag-reply sa query kona ito..TIA

  6. #VUL is life insurance with investment.
    #LifeInsurance:
    It offers a self-completing fund when the #family need it the most. It is there to assure the plans you have set up for your loved-ones. It is there to make sure that your #child / #children will still go to #school. It is there to make sure that your family can still #afford to live in the house you bought for them. It is there to make sure that your spouse will still have #time to be with your kids and not have to work longer hours. It is there to pay off the debt that you will be leaving behind. It is there to make sure that your family will not be burdened financially because the #provider is not there anymore. Life insurance is for your family.
    #Investment:
    It helps build a #multipurpose fund for your #future. It is upto you where you want to use it. It may be used to #build a #retirement fund, #medical fund, #college fund, #dream fund, #travel fund or #foundation fund to name a few. In worst case scenarios where life challenges you and you cannot afford to pay your life insurance, it will be this multipurpose fund that will pay for your life insurance as long as the funds are still available. This multipurpose fund helps you #BuyTime upto the time when you can start to pay your life insurance again. In cases when you cannot pay anymore, these funds can still #buy you more years of life insurance. (As long as funds are enough to pay for the charges).
    Did you know that your VUL has the potential of leaving more funds to your family over time?
    Example: You bought 1M insurance. Over time, as long as you continuously pay the plan and stick to the payment schedule, your family may get more than the 1M you bought for them.
    What it is not? It is not an investment with free insurance. Hence, the charges.
    Why do you pay more with VUL than when getting TERM? Because it has more benefits.
    What I enumerated are just some of the benefits.

  7. before investing buy yourself an insurance policy first. based on your example. you buy single pay VUl after one year untoward incident happen, the policy holder only get 125%. with 28k regular pay, you get php 1 million pesos if accident occur in a year. which is better?

  8. I have an axa account vul for about 4 months now 5k+/month. My question is….out of 4 months my account value is just around 12k+.
    Is this "account value" is the investment side already? I assume na out of 20k for 4months yung nawawalang 8k ay syang napunta sa insurance side.
    Please someone enlighten me.

  9. Sir, VUL products may not be the best but it does serve a good purpose for individuals. Term insurances are only feasible for individuals who are in good state of health and are most often available only up to 60 years od f age. Also, it should be renewed every yr or every 5 yrs, thus, as you become older, there's a slimmer chance to get approved. Baka hindi ka rin marunong mag-compute ng estate tax kaya mo nasabi na single-pay ang best way to pay for that. There are rich people whose families are bound to pay 50 or even 100M for their estate taxes. You mean to say they should pay a single premium equally as high as that? Para mo silang pinag advanced payment. With all due respect sir, mejo lawakan mo pa ang research mo before you post his kind of video. Again, VUL may not be the best investment instrument, financial advisors who are professional and high credibility dont claim that. But it does surely serve a good and wise purpose.

  10. @pinoy money academy, Sir kumuha ako nang VUL 60K/Annum for the period of 5 years, tapos ang coverage is 600k pesos lang , if ever may mangyari na masama sa akin. Napaisip tuloy ako kung tama ba ang ginawa ko, LOL, currently i'm working as an OFW and insurred sa aming company. . 1st year palang ang nabayaran ko …

  11. In regular pay VULs, it shows that you only paid 84,000 for the insurance coverage for life PLUS it earns cash value which you can use when you don't need the protection anymore. In Term Insurance, it may be cheaper but when the term has ended and you didn't die (which is a good thing, of course lol), you'll get nothing. Also, if you compute for the premium paid for the insurance for every year of coverage, the regular pay is cheaper. Correct me if I'm wrong with this.

  12. term insurance are bad pano kung suddenly mamatay ka at d ka naka apply e di kawawa ang family mo…insurance is insurance kailangan to at hindi basta investment ito ay benifits to the family…ur not healthy all the time and have te to buy term every five years bka d ka makapasa pag may cancer ka na lol😂

  13. Hi! Ameera here.
    Planned to start my Healthcare Insurance next month under Kaiser Healthcare Inc. payable within 7years and with return of interest at 85%.

    You have mentioned in this particular video that you have an Insurance at the same time Investment which cost 5,000 pesos anual payments for 3-5years with 125% cost of return.
    Kindly send me details about such Insurance re Investment via my email: [email protected]gmail.com.

    Thank you very much.

  14. Hi Sir, Thank you for educating us. Im planning to get a VUL plan from a certain Insurance company. I would like to know your opinion on Sun Flexilink product as VUL. Hoping to here fron you soon.

  15. Hi guys! If you're living in Palawan and you need a financial advisor. Just get in touch in this number 09075572949 or 09266344763. Have a brighter future everyone!

  16. I work in an Insurance Company. I'm not being biased but as what I understand about VULs for regular pays, they are not necessarily considered as "pwede na". Remember you are investing for you future, meaning you are not just 'insuring your life' but you are also letting your money grow. In term insurance, you won't get anything unless you die within the coverage years. In VUL, wether you die or not, you will get something from your policy. consider VULs as wine making. The longer you let your money work there, the better the quality.

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