In ‘Financial Goals 2019’, I said I didn’t consider insurance as an investment and thought of it as more of an expense. And I think I’m quickly taking that back.
Earlier today, I was rifling through mail I haven’t gotten to opening and one of it was the summary of my first insurance policy. The plan was Manulife’s Affluence Builder, which is a life insurance and an investment plan in one.
I was very surprised to see that the financial investment part has gotten to a healthy range.
I bought the policy in June 2014 — the life coverage part is what your beneficiary gets in case of demise; the total fund value can work similarly but it can also be withdrawn at any point when you need it.
To illustrate (in a very simple way) if the investment was worth it, let’s talk about how much I have paid against the value of the policy now.
Since 2014, I have put in approximately Php 618k and the total value as of Aug 2019 is 1.22M. That’s a 97% increase in value — and it’s going to continue maturing with you not having to do anything.
I bet some of you did the math and thought, I can’t afford that. I want to point out that I started investing at 35, which is pretty late if you want to retire at 50-ish, so I am playing catch up. I sacrificed other YOLO expenses during the early years and then didn’t change my lifestyle a lot as my income grew.
When I got insurance, I barely knew what I was doing. I was talking to a friend about how to ensure I can fund my lifestyle into retirement and she was surprised that I don’t have any insurance. I signed my first policy not fully understanding all of it except the basics but knew that it was a better than buying the latest iphone. 5 years later, I am still not an expert but you know what? I wish I had started it sooner than I did. 🤔
What’s your take on insurance? What, in your opinion, are the better insurance products out there?