I am one of the many devoted Filipinos who advocate financial literacy, and one of the common things that I always encounter is the never-ending debate of which is better between BTID and VUL. As one of the financial educators in the International Marketing Group, I am interested also in the issue and fortunately, I was able to find two thought-provoking articles about BTID vs VUL.
The first article, titled “Buy Term Invest The Difference (BTID), is that for me? Myth vs Reality” by Dr. Pinky De Leon-Intal, addresses the issue about the facts and the myths of Buy Term Invest the Difference (BTID). Some of the things that she raised are that life insurance is important when it comes to wealth preservation since it is one of the simplest and the cheapest ways of protecting the accumulated wealth. That term insurance premium increases as you get older and your policy will not be renewed if you are diagnosed with an illness. Another thing is, most term life insurance coverage is only up to 65 -70 years old, and what if you lived longer?
The second article is by Fitz Villafuerte entitled “BTID vs VUL and How I See Financial Planning With Respect to Life Insurance” which he believed that protection always comes before investing and getting term insurance is the cheapest option. He also mentioned that “some people got offended when I said that those who get VULs are lazy” since they were too lazy to learn investing, to understand VULs, and to question the true intention of the insurance agent but of course he made some exemptions. He also added that term life insurance is the most affordable to protect your family financially in the short-term and a must for breadwinners who don’t have a good financial foundation.
Basing on these two articles about BTID vs VUL and what I learned so far, I have listed three actions that I would recommend to people who are still confused about which to choose between the two.
- Identify Your Goal – Think which of the two is best suited to help you attain your goal.
- Assess Financial Capability – Find out how much premium can you afford to pay.
- Seek Financial Help – Look for a reliable financial adviser that can help and guide you objectively.
From now on, you should and always look for the different options available in the market and to understand it first before availing any life insurance or financial products in order to derive an appropriate decision and to avoid regret.