VUL: A Closer Look

Wouldn't it be nice if there's a financial product that will protect us from life's risks like death, accident, and sickness while also growing our hard-earned money through mutual fund investments? It's like having a two-in-one financial product and you'll just pay for one.

If this is the type of investment that you are looking for, then read on so you can learn more about Variable Universal Life or VUL.

What is VUL?

VUL is simple to understand. Variable Universal Life is an insurance product that gives you financial protection in form of life and health insurance as well as growth opportunities for your money through mutual fund investments.

To make things easy to understand, remember this equation:


One important component of a VUL plan is life insurance. When you purchase a VUL plan, you are technically purchasing a life insurance plan that you can use to protect yourself from life's uncertainty: death, accidents, and sickness.

The concept of life insurance is very simple to understand. You need to ask yourself these questions:

If I die today...

  • Will my loved ones be able to continue the same lifestyle that I provided for them?
  • Can they shoulder all of my funeral expenses?
  • Can they continue paying the debts and other expenses that I will leave to them?
  • Will I be able to leave a significant amount for my loved ones?

If you answer "no" to any of these questions, then you need a life insurance.

You may also add additional coverage features for hospital bills, critical illness expenses, accidents, and many more through insurance riders. It is always best to speak with an insurance adviser so you can learn more about insurance and the available riders for you.

Mutual Funds

What makes VUL special is the fact that this financial product isn't just about death, accident, and sickness. VUL also gives your money a fighting chance against inflation and room for growth through its mutual fund component.

When you purchase a VUL plan, you can choose several funds that will enable you to invest in different kinds of instruments. Here are the most common funds that you can invest in through VUL:

  • Equity Fund - This is a fund that invests in the Philippine Stock Exchange.
  • Bond Fund - This is a fund that invests in bonds and other debt securities.
  • Balanced Fund - This fund is a combination of equity and bond fund.

To know more about the investment component of a VUL plan and what funds are right for your risk profile, it is best to speak with a financial adviser.

Why should I invest in VUL?

There are tons of advantages VUL bring to the table. Here are a few:

  • Tax-free benefits - When you die, all of your assets won't be transferred to your loved ones instantly. All of your assets—which includes savings, stocks, real estate properties, and other types of assets—will be frozen until the necessary estate taxes are paid by your loved ones.

    When you invest in a VUL plan, your irrevocable beneficiaries will receive all of your life insurance benefits—including all the money your VUL accumulated through its investment component—without being charged for any estate taxes. This is one of the strongest advantages VUL have compared to a direct investment in stocks, bonds, mutual funds, UITFs, and other securities.
  • Ability to withdraw all or part of your investments - You can withdraw all or part of the investment component of your VUL plan. This is a great feature that you can take advantage whenever you encounter emergency expenses. Just remember that when you withdraw all of your accumulated cash from your VUL plan's investment component, the whole VUL plan could be terminated and that includes your insurance benefits.
  • Better than what the bank provides - As you can see, it is best to place part of your savings in VUL because you won't just get financial protection through its insurance component. You will also be able to access investment funds that could earn a higher return for your hard-earned money compared to what the banks are willing to give you.

How much can ₱3,000.00 monthly go with VUL?

Let's just say you are considering to get a 10-Year VUL plan and you are willing to invest ₱3,000.00 monthly for 10 years. Here are an estimated value and benefits that you can get:

✔ Basic Death Benefit: ₱600,000.00
✔ Accidental Death Benefit (Rider): ₱600,000.00
✔ Critical Illness Benefit (Rider): ₱300,000.00
✔ Daily Hospital Income Benefit (Rider): ₱2,000.00 daily
✔ ICU Income Benefit (Rider): ₱2,000.00 daily
✔ Projected Investment Value at Age 65: ₱4,000,000.00

Imagine how far your ₱3,000.00 could go by investing in a VUL plan.

If you want to receive a personalized proposal for a VUL plan, and if you want to learn more about this financial product, don't hesitate to leave me a message HERE.

About the Writer

Alfred Cardenas is a Licensed Financial Adviser and Certified Investment Solicitor. Follow him on social media for more practical money tips and advice.



    • Noel

      Good post…will share this with my wife 😜

    • Marsha

      Para sa tamad magaral ng investing and magastos na millennial! hahahahaha!

    • Troy

      Thanks for sharing alfred, this is great for busy people like me who have no time and interest in investing but still wants to grow my money.

    • Jackie

      Thanks alfred! I’ve heard about vul before but I haven’t got a chance to learn more about it. Let’s talk soon!

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