“Buy Term, Invest the Difference” (BTID) is one of the most talked-about financial strategies. On paper, it sounds great—you buy cheaper term life insurance and invest the rest, potentially making more money over time. But is it really the smarter move for everyone?
In an exclusive discussion with Financial Adviser PH, Rienzie Biolena, a Registered Financial Planner, shared why BTID isn’t always the best approach for everyone.
“Motherhood statements are just good soundbites that, if applied to a person’s unique case, may not hold true. In some cases, they provide more harm than good,” he explains.
BTID Sounds Smart, But There’s a Catch
The idea behind BTID is simple: you buy a term life insurance policy, which is cheaper than whole life or VUL, and invest the savings in stocks, bonds, or mutual funds for higher potential returns.
The problem? Not everyone actually invests the difference. Many end up spending it, leaving them underinsured and with little to no savings.
“It’s like arguing which one is better: Vios or City, without actually asking the client what their needs are,” Biolena points out.
Why a VUL Might Be the Better Choice
For some people, a Variable Universal Life (VUL) policy makes more sense. It forces disciplined savings, provides lifelong coverage, and offers built-in investment growth. While it may not be as aggressive as pure investing, it’s a hands-off approach that works for people who struggle with financial discipline.
So, What’s Right for You?
It comes down to your habits and financial discipline. If you’re confident in managing investments and sticking to a plan, BTID can be a great move. But if you need structured savings and lifelong coverage, VUL might be the smarter bet.
The bottom line? There’s no universal answer. Instead of blindly following financial trends, focus on what actually works for you.
