Is It Worth Getting A Variable Universal Life Insurance (VUL)?

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As I was searching for a life insurance to protect myself and my family, I came across a type of product through the help of my financial advisor. She recommended getting the Variable Universal Life (VUL) insurance policy. I was drawn by the unique fusion of life insurance and investment.

For those of you who are unfamiliar with VUL, it is a type of life insurance policy with a built-in savings component (cash value). The cash value can be invested into different accounts consisting of mutual funds, bonds, or stocks. Associated with the savings component is a maximum cap and a minimum floor on the investment return.

What’s more? The premium you need to shell out is flexible. Flexibility is one of the advantages of having a VUL. Let us start with that.


Last week, I invited three experts to host a Financial Literacy Talk in our workplace. These experts discussed about the current economical state of the country as well as the investment and insurance options available in the market. One of the products that they highlighted was the VUL.

We all have different needs and different capabilities. However, that must not stop us to get an insurance. Fortunately, VUL’s premium can go up and down for several reasons. These reasons depend on your lifestyle and needs. For instance, you may consider to raise the death benefit as a breadwinner. Increasing your death benefit may require proof of “insurability”. Nonetheless, the performance of your cash value account may allow you to lower your premium.


There is a considerable weight on the shoulders of the loved ones who have to go through loss. Money will never be able to replace someone’s presence, but it will help lessen the financial weight when going through a death of a family member. You need to avoid the double-whammy of losing someone and getting sucked into debt.

VUL offers both investment options, death benefits, and critical illness coverage. Study these elements before signing up.


VUL has varied sub-accounts, which allow the investment of the cash value. Its function is similar to mutual fund with an array of stock and bond accounts along with a money market option. Some policies may restrict the number of transfers into and out of the funds.

Interestingly, VUL got its name from the varying results of investment in the ever-changing market. Keep in mind that exposure to market fluctuations can generate significant returns or substantial losses.

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Let us move on the out-payments. You must ensure that you are insurable before implementing a strategy involving VUL or other life insurance policies. Several factors will affect the availability and cost of your life insurance. These factors include age, health conditions, and amount of insurance purchased. You see, life insurance have other charges attached to it. For instance, if a policy is surrendered prematurely, some policyholders may have income tax implications. Any guarantees associated with the policy are dependent on the ability of the issuing insurance company to continue making claim payments in the long run. Choose wisely.

DISCLAIMER: Please note that this VUL product is most applicable to American and European insurance issuer. Thank you.

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