VUL Insurance Philippines: Is It A Good Investment?

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The big question on almost everyone’s mind at the end of the year is, “Where should I spend my hard-earned money?” When it comes to the 13th-month pay, the answer may not be so simple.

Whereas rewarding ourselves for the hard work and input throughout the year, impulse buying won’t contribute positively to the long-term goals. Shouldn’t we take this opportunity to save even more toward the future?

In this post, I’ll go through the Variable Universal Life (VUL) insurance policy, a two-in-one combination of life insurance and investment. VUL is a two-in-one combination of life insurance and investment that makes it a win-win situation for you.

What is VUL Insurance?

VUL was introduced by PruLife UK in 2002 in the Philippines. This led to the rise of other investment types such as UITF and Mutual Fund.

The belief that VUL is just an investment with huge returns is widespread. However, VUL is primarily an insurance policy with the additional perk of investments.

This implies that a part of your budget is insurance, with the rest going to investments. So for new individuals, VUL is ideal. It’s especially great for those who don’t have any insurance and aren’t sure where to put their money. It’s like killing two birds with a single stone!

If you pass away, a lump sum of money will be given to your beneficiaries. But while you’re still alive and kicking, your assets will continue to grow, allowing you to prepare and plan for future objectives such as education and retirement.

VUL functions both as wealth protection and wealth accumulation. One must protect their wealth first. By doing so, you’ll rest assured that in case something unexpected happens, you have the wealth and resources to get through it.


VUL Benefits

So, why should you keep money in VUL rather than banks or comparable institutions?


To begin with, withdrawing your money doesn’t attract a tax. It also offers better growth than traditional banks.

long-term investment

It’s a long-term investment. Depending on your risk tolerance, you’ll decide which funds to invest in yourself. Nevertheless, keep in mind that low-risk investments offer little return, but high-risk ones may earn high profits.


It’s also flexible. You may add funds at any time, allowing your assets to increase even more.


Finally, you can partially or fully withdraw the fund value if you ever need it. But, I would highly recommend leaving it alone if you’re not in dire need of it.

You can take out a part of the invested fund, should you need it. This should only be when you have no other option.

benefits of vul insurance

2 Types of VUL

The 2 types are regular pay and single pay.

Regular VUL

The most frequent alternative is regular pay which entails investing for the next 5-10 years. You may also make top-ups on a quarterly, semi-annual, or annual basis. Depending on your age, it might be as little as ₱1500 per month.

Single Pay VUL

Contrariwise, single pay is a one-time payment on investments. The minimum that you can pay in this type is ₱100,00. As you can already see, it’s ideal for those with sufficient insurance coverage or even those who want to expand their investment portfolio.

Investment entails beginning small and early. Time is still the most important factor in how much your assets will grow, regardless of how much you invest.

People can get insurance right away while they’re young, and it’s still inexpensive. It’s preferable to get insurance now while you’re healthy rather than regret not doing so when desperately in need of the cover.

2 types of VUL

Bank vs VUL

A basic bank savings account may be used for day-to-day expenses and short-term needs but is not reliable in case of emergency, accident, critical illness, future education, early death, income replacement, or retirement. This is where an Investment-Linked Insurance Policy comes into play.

Term insurance vs VUL

Whereas variable life insurance is rigid and pays benefits to the insured’s beneficiaries, it also appreciates in cash value. On the other hand, term life insurance is temporary, and the death benefit is restricted to a specific predetermined period.

Mutual fund vs VUL

If you want life insurance, go for a VUL. Choose a mutual fund or a UITF if you don’t have the know-how to invest in stocks but still want to take part in the Philippine economy’s growth.


The main distinction is that UITFs are provided by banks, whereas mutual funds are their organizations.

VUL insurance pros and cons


Death benefit that is often income tax-free

The option of transferring money to your beneficiaries when you die is a tax-free death benefit. They may use the cash to pay for funeral costs or take time off work to mourn your passing.

A death benefit might be used for various things, including charity work, a memorial fund, or paying inheritance tax.

Potentially grow cash tax-deferred

Many individuals enroll for VUL because of the potential to grow tax-deferred money. If the investment alternatives within your policy increase in value, you won’t have to pay taxes on that growth until you make a withdrawal. However, expect your policy’s cash value to change daily as the market swings.

Tax laws that apply to VUL are complicated. It’s important to talk with an insurance advisor.

Flexible premium payments

You may change the amount and frequency of your life insurance payments by using a flexible payment plan. Within the constraints of your contract, you have the option to slow down or speed up contributions.

Adjustable coverage amount

A VUL policy might allow you to boost or decrease the size of your death benefit. If you have insurance, change the amount of coverage. To help you make this happen, use the options provided above.

If you want to increase your insurance policy’s amount, you have to have enough money. There are certain restrictions for increases and decreases. These depend on the size of the contract and your age. Increases might need to be proved of insurability. Charges for a reduction in coverage may be applied.



Depending on VUL’s complexity, utilizing it may be equally challenging. For instance, a VUL policy is much more complicated compared to term and whole life policies. Before you buy a product, make sure you know what your goal is. Figure out how this product will help you achieve that goal.

Consider consulting with a financial counselor or tax advisor about the specifics, and read prospectuses before making any decisions.

Higher premium payments

VULs have more stringent funding conditions than other types of life insurance. VULs are typically more expensive to maintain, with higher contract charges and possible investment expenses.

Consider consulting with a financial expert if you want to get the most out of your monetary contributions.

Longer time horizons

Those with shorter time horizons should look for other options. This policy isn’t suitable for everyone because it comes with a longer waiting period.

VUL contracts are intended to help customers achieve long-term financial objectives.

Investments involve risk

Stocks and bonds vary in value over time. It follows that if you invest the cash value of your life insurance in investment subaccounts, it will be affected by market fluctuations and associated investment risks.

You could lose your profits and original investment if your assets don’t perform well overall. You could lose your life insurance, including the initial death benefit you paid for to make the matter worse.

To discover how VUL compares, talk to a financial advisor familiar with a wide range of investing and insurance alternatives.

Wrapping Up

Consider the following:

  1. Turning P1,000 into P1,003 is called a BANK.
  2. Turning P1,000 into P1,300 is called an INVESTMENT
  3. Turning P1,000 into P100,000 is called an INSURANCE PLAN.

Irrespective of how accomplished a person is in their life, they cannot escape death and aging.

When a person is confined to their bed:

  1. A gift of P2,000 could be from FRIENDS.
  2. A gift of P20,000 could be from RELATIVES
  3. A gift of P200,000 could be from PARENTS or SIBLINGS
  4. A gift of 2,000,000 OR MORE could be from INSURANCE.

INSURANCE is the appeal of a product you may purchase. While you’re young and healthy, get as much insurance as you can afford.

Since we must first be financially secure before achieving financial freedom, I strongly believe that insurance should be the primary investment for everyone.

It offers a lump sum of money to replace/maintain the lifestyle you and your family had before death, disability, or critical illness struck. Additionally, it includes perks that can be used to cover childrens’ education fees, retirement, or even car and house purchases.

The next stage in establishing your financial stability is to invest for wealth creation. This can be done through UITF, mutual funds, stocks, real estate, alternative investments, or starting your own company.

Whatever investment vehicle you choose, one thing is certain:

“the best time to invest was yesterday, the next best time is today, and the worst time is tomorrow.”

If you learned that you wish to begin working with VUL right away, please do not hesitate to contact us. Also, if you have any queries about insurance or investments, please let us know, and we will do all that we can to clarify everything to you.


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