What Is VUL? 5 Reasons Why It’s Actually a Powerful Tool to Kickstart Your Financial Security

For others, New Year’s resolutions involve being more mindful of their health or starting a new hobby. But for many, becoming more financially secure and protected is just as crucial.

If you’re already tracking every expense, saving, and cooking rather than ordering yet still eager to find better ways to stay financially protected, it’s time to look at insurance and investment options—and tools that can give you both.

One popular (but often misunderstood) tool is Variable Unit-Linked (VUL) insurance—an insurance plan that could help provide you and your family long-term financial security, covering essentials such as education, health needs, or unexpected emergencies.

Photo: Sun Life Philippines

What is VUL insurance (and why is it sparking debate)?

Getting insurance isn’t always a priority for many Filipinos. For the working class, especially Gen Zs and millennials, setting aside a chunk of their salary may feel challenging, given rising day-to-day expenses and financial uncertainty.

But this is where understanding flexible financial tools becomes important. VUL serves as a life insurance product with added investment features, allowing individuals to protect themselves while having the potential to grow their money at the same time.

Simply put, part of what you pay for a VUL goes toward your life insurance coverage, while another part is invested in professionally managed funds. Over time, this invested portion—called the fund value—has the potential to grow and can be used for future financial goals.

Despite this, VUL has garnered a negative reputation because it’s often misrepresented as a quick way to get rich or purely as an investment vehicle when it is, ultimately, an insurance plan.

While it is true that VUL has market-linked risks that could make your fund value go up or down, working with a skilled financial advisor can help you understand the risks and reach your financial goals more effectively.

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5 reasons why VUL is a powerful insurance tool

Still feeling undecided or skeptical about getting a VUL? Here are some reasons why choosing a VUL can be a big step toward being financially protected—and why it may be the right fit for you.

1. It combines protection and growth potential in one plan

It’s an ideal tool for anyone wanting to have protection first and growth second. VUL primarily offers life insurance coverage, but it also provides an opportunity to grow your money. This makes it easier to build financial security without relying on dubious financial schemes that promise quick returns that are too good to be true.

A VUL is designed to protect you and your loved ones financially, while the investment component allows you to grow your money over time for long-term goals.

Photo: Unsplash

2. It doesn’t compromise protection as you pursue long-term growth

One common misconception is that having a VUL means your funds are entirely tied to investments, and you’ll lose money in the process when the market is down. In reality, a VUL is protection-first, allowing you to pursue long-term financial growth while also safeguarding your family’s future needs.

According to Ivan Corcuera, Head of Insurance Investments at Sun Life Investment Management and Trust Corporation, a VUL is a protection-first, long-term commitment that is guaranteed to protect your family and loved ones’ future. “Unlike a pure investment vehicle where beneficiaries only receive the value of accumulated savings, a VUL ensures that they receive a predetermined, substantial amount,” he explained.

“With a VUL, if something happens to the insured early on–say after just one payment–their beneficiaries will still receive the full death benefit, which is much larger than the single payment made. But with a pure investment solution, the beneficiaries would only get back the amount that was actually invested, which is usually very small at the start.”

3. It’s not a one-size-fits-all product

A common misconception about VUL is that it’s a one-size-fits-all solution, when in reality, it’s designed to be customizable based on individual needs and goals.

This is where the guidance of a trusted and knowledgeable financial advisor comes into play. Sun Life financial advisors, for example, can help tailor your plan—from adjusting premium payments to choosing investment funds that match your risk appetite and financial goals. This can help bring peace of mind to Gen Zs and millennials as they naturally go through career changes, experience milestones, or face unexpected life events down the road.

4. It encourages more disciplined saving habits

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VULs promote regular, disciplined contributions, helping young adults develop a healthy and consistent saving habit over time. Furthermore, it encourages you to set aside money regularly and responsibly, making financial planning a part of your routine rather than being an afterthought.

As you start thinking long term and consider what you and your family may need in the future, having life insurance—or the added flexibility of a VUL—becomes especially useful for generations navigating rising living costs and lifestyle expenses.

5. It can support your long-term goals

Are you planning to buy a home or invest in a property? Or perhaps you’re considering funding your child’s education or ensuring your family is financially protected in case of emergencies? Whatever your plans may be, VULs are designed to support long-term financial goals, making them a suitable option for Gen Zs and millennials who are building their future step by step.

Sun Life offers flexible and reliable VUL plans that allow you to adjust your premiums, switch investment funds, and customize your coverage in a way that aligns with your needs and financial goals for the future.

Photo: Unsplash

New Year, Better Financial Planning

Being financially secure is one of the greatest gifts you can give yourself and your loved ones as you chase your goals one step at a time.

While deciding to get a VUL may not be something you do overnight, having the right guidance matters. Choosing a right, tailor-fit financial plan can help provide a safety net for life’s big or unexpected events.

A well-trusted provider such as Sun Life—the first and longest-standing life insurance company in the Philippines—offers VUL plans that can help Gen Zs and millennials protect their future with confidence.

To learn more about VULs and how they can be adjusted to your needs, head to Sun Life’s VUL info page here.

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