Cancel VUL Insurance Philippines: Why I Did It and What I Learned

Why I’m Sharing This

If you’ve ever thought about whether to cancel VUL insurance in the Philippines, you’re not alone. I went through this process myself, and in this post, I’ll share why I did it, the benefits of VUL, what I learned, and what I did after.

To be honest, when I first signed up, I just wanted to have insurance, but I didn’t really know what to get or which type would truly benefit me in the future. My Financial Advisor explained the details of the VUL plan, and it sounded good at the time, but I was still clueless about what other options were available, like term insurance, whole life, or even separating insurance and investment. I thought VUL was the safest choice because it offered both in one package.

(Disclaimer: This is based on my personal experience. VUL might work well for others, but it didn’t fit my goals.)

What Is VUL Insurance and Why People Choose It

VUL stands for Variable Universal Life insurance, a plan that combines:

• Life Insurance Coverage – Financial protection for your family.
• Investment Component – A portion of your premium goes to funds, aiming for growth.

This setup sounds convenient: insurance and investment in one payment. Many Filipinos choose VUL for this reason.

The Benefits of VUL Insurance

Before I explain why I decided to cancel, let’s be fair, VUL does offer benefits:

• Life Coverage – ₱1,000,000 guaranteed death benefit.
• Accidental Death Benefit (ADB) – Extra ₱1,000,000 coverage for accidents.
• Disability Rider – Waives premiums if permanently disabled.
• Living Benefits – Access your fund value during your lifetime.
• Investment Growth – Potential growth through linked funds.

Example (Typical Plan)

For an annual premium of about ₱36,000 (₱3,000/month):

• Death Benefit: ₱1,000,000
• Accidental Benefit: ₱1,000,000
• Waiver of Premium: For disability
• Estimated Fund Value after 10 years: ₱X,XXX,XXX (depending on market)

Learn more from the Insurance Commission Philippines

Why I Decided to Cancel My VUL Insurance in the Philippines

Before sharing my reasons, here’s a quick overview of my actual policy details:

Policy Details	Value
Policy Start	2018
Annual Premium	₱78,000
Total Premium Paid	₱526,500
Fund Value	₱470,000
Surrender Charge	₱70,000 (15% of fund value since the plan was ended before maturity)
Total Charges	₱126,500
Surrender Value Received	₱400,000 (after deductions, about 85% of Fund Value)

Quick Perspective:
After almost 7 years, the difference between my total premiums and the surrender value was around ₱126,500. If you think about it, that’s roughly ₱ 18,000 per year for the coverage and peace of mind I had during that time, not bad at all, right?

Why did I cancel?

• I preferred separate investments for control
• Long break-even period
• Changing financial priorities
• Need for liquidity
• Misalignment with retirement goals

The Reality About VUL Costs

VUL isn’t bad, it’s just not for everyone. What many don’t realize:

• High Initial Charges – A large portion of your early premiums goes toward policy fees and administrative costs rather than investments.
• Commission Structure – Part of your first-year premium is allocated to distribution and agent compensation, which is standard across insurance products.
• Market Risk – The investment component is subject to market fluctuations, while policy charges remain fixed, which can impact fund growth.

How to Cancel VUL Insurance in the Philippines

Here’s how I started the process to cancel my VUL insurance in the Philippines.

1. Contact your agent or insurance provider – Inform them of your decision and request the surrender process details.
2. Prepare your requirements – In my case, I only submitted:
   • A clear copy of my valid ID with signature
   • Proof of my bank account details for the fund transfer
     (Other companies may also require the original policy contract and a signed surrender form)
3. Submit the documents – Either through your agent or directly to the insurer’s office.
4. Wait for processing – Usually takes around 7–15 working days. From my experience, it only took about 1–2 days to get the fund value, surprisingly quick!
5. Receive your surrender value – The remaining fund value after deductions will be sent to your preferred bank account.

Note: If you cancel early, expect surrender charges. These decrease over time but won’t fully disappear.

What I Did After Cancelling My VUL

I still needed protection and wanted to grow my money, so I:

• Started building an emergency fund for unexpected expenses.
• Began looking for a Term Life Insurance policy that fits my budget and needs.
• Started exploring investment options like Pag-IBIG MP2, index funds, and REITs for long-term growth and flexibility.

(If you’re curious, Pag-IBIG MP2 is a government savings program with guaranteed dividends, and index funds let you invest in a basket of top companies for diversification.)

This approach gave me flexibility and lower costs.

Should You Cancel Your VUL Insurance Too?

The answer depends on your goals:

• If you want convenience, VUL might be for you
• If you want control and lower costs, separate insurance and investment may be better

Do the math, understand the fees, and make the choice that fits your plan.

Final Thoughts

I don’t regret starting my VUL, it taught me valuable lessons about financial planning. But now, I prefer an approach that better fits my current goals.

If you’re thinking whether to cancel VUL insurance in the Philippines, review your numbers, explore alternatives, and make an informed decision.