Multiple Option Super Term 18 (M.O.S.T. 18) Life Insurance

It is a term insurance product with 18 years coverage.

Life insurance provides financial protection for your family. And among the many types of life insurance out there, term insurance is the most affordable.

How affordable is it? For a 30-year old, the annual premium would only be P5,710 for a P1 million coverage. Again, you only have to pay P5,710 per year (not per month, not per quarter) and you’re already insured for P1 million.

It has an optional savings and investment component.

What makes Manila Bankers Life MOST 18 unique is that you can choose to pay more than your annual premium. And the excess cash that you pay will go to a PDF or Premium Deposit Fund.

The PDF is like a savings account. You can put more money there anytime you want. And you can also withdraw your money from it any time you need it.

But better than a savings account, the amount in your PDF can also earn additional cash for you because the company can invest it for you.

For example, if you paid P8,710 instead of P5,710 for a particular year. Then the excess P3,000 will go to your PDF.

The following year, because you have P3,000 in your PDF, you can choose to just pay P2,710 to pay for the annual premium of your life insurance.

But let’s say that the market was good during the year, and the P3,000 in your PDF earned and became P3,710 in value. Then you’ll only need to pay P2,000 for next year’s annual premium.

From our earlier example, the annual premium of a 30-year old with P1 million coverage is P5,710.

For the first year, there’s an additional one-time policy fee of P500. But for the next 17 years, the annual premium will be fixed at P5,710.

As the table shows, you were contributing P12,000 every year for the first five years. This is more than your annual premium. So the excess cash is going to your PDF.

For this illustration, we assume that the PDF investment consistently earns 4% every year. This is the rate your money that’s invested inside your PDF is growing every year.

On the 6th year, you suddenly needed P20,000 for a personal expense. Since your PDF is worth P29,113 during this time. You have the option to withdraw from it, which you did.

On the 7th year, times were difficult and your budget is tight. But because the value of your PDF can cover the annual premium. You have the option to not pay that year. And that’s exactly what you did.

Then starting on the 8th year, you chose to contribute P20,000 for the next five years. This grew your PDF amount significantly.

It grew so much that you didn’t have to contribute anymore because the PDF can already cover your annual premiums until the 18th year of the policy.

Interestingly, during the 16th year, on your 45th birthday, you chose to withdraw P40,000 from your PDF to use for your birthday party. Which is totally okay because your PDF is worth P71,661.

**credits to Fitz Villafuerte**