Variable Life Insurance Basics
With a Variable Life Insurance Policy (also known as Variable Appreciable Life Insurance or VAL) you get permanent life-long protection. The word "Variable" in the plan name means that you can divert a portion of your premium dollars into a separate account, such as an equity fund, bond fund, money market fund or any combination of the above.
With Variable Life Insurance Your...
- Policy has a guaranteed minimum benefit.
- Premiums never change.
- Equity that you've built up through payments can be reinvested.
- Earnings in your Cash Value portfolio are tax-deferred and can be transferred between portfolios without penalty.
- Portfolios may have a fixed minimum return, providing you with guaranteed growth.
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How Does Variable Life Insurance Work?
It is possible for the cash value of the death benefit to fluctuate, causing it to rise and drop at any given time; this depends on the performance of the investment part of the insurance policy.
Some policies specify that your death benefit will not fall below a minimum amount, but rarely will an insurer give you a minimum cash value. A variable life insurance policy is in the same family as whole life insurance; the risks of the investment are considered as a securities contract. It is regulated as securities under the Federal Securities Laws and can’t be sold without a prospectus.
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Benefits of Variable Life Insurance
Many people decide to get the variable life insurance because you are able to participate in various investment options without having to be taxed on your earnings (until you surrender your policy). You are also able to get lower amounts on your premiums by applying interest earned on the investments towards them. The ability to make more money in the end is one of the main alluring factors behind variable life insurance. Find out more on variable life insurance by requesting a quote from Variable Life Insurance today!