Selling point: NO ESTATE TAX for life insurance proceeds.
Examples: for someone who die at 45 yrs, old.
Estate Tax for 1 million pesos net taxable estate tax per RA 8424 it is 55,000 pesos. One time big time payment to BIR upon death.
With 1 million life insurance: if yearly premium is 25,000 for 20 years starting at age 25 amount of paid out to the insurance company will be about 500,000 pesos.
Insurance companies want the insured to be 1 million to have big initial payment of more than 50,000 pesos. Compare this with the 55,000 pesos for estate tax.
When it is time to claim the 1 million after many years of yearly premium payments, that is more than what the BIR will collect.
Insurance is peddled based on psychology leaving something for your beneficiary.
No, I will not pay the insurance premiums. But I will invest in blue chips or in real property installments ( which I can use now or rent it out) so that after 20 years, it will be worth several million pesos.
Simple analysis based on cash out vs cash net value on a maturity for several years-say 5 years, 10 years and 20 years. Insurance companies uses risk management algorithms to compute how much to charge. People under 30 years have extremely low death rates (sickness related) and therefore -low premiums vs. people over 55 years old.