What Is Variable Universal Life Insurance
What Is Variable Universal Life Insurance. It is a policy that pays a specified amount to your family or others (your beneficiaries) upon your death. Variable universal life (vul) insurance is a type of permanent life insurance policy that allows for the cash component to be invested to produce greater returns.
What is variable life insurance? A variable universal life policy features a blend of features characteristic of variable life and universal life policies. They function like other cash value life insurance policies in that the “term insurance cost” is deducted from the premium paid and them the rest of what’s paid goes into the “cash values”.
You can adjust the insurance premiums and you have the option of investing the cash value in financial markets.
Variable universal life insurance is a lifelong investment. A variable life insurance policy is a contract between you and an insurance company. However, variable universal life (vul) insurance, which typically allows for flexible premiums , allows the policyholder to invest its.
But, that’s pretty much where the similarities end.
The cash value of a variable universal policy can be invested to grow the value of the account. You also have investment options: Unlike many other types of life insurance products in which life insurance itself is the central feature, the investment provision takes center stage with vul.
That’s because it’s a permanent policy that offers both a death benefit and an investment provision.
Variable universal life is a type of permanent life insurance policy. Let’s make that distinction upfront. A variable universal life policy provides permanent life insurance protection with a cash value component.
How variable universal life insurance works
Variable life insurance policies are investments that combine life insurance and a mutual fund. The many flexibilities of variable universal life insurance make it a substantially different life insurance product. Variable universal life is a life insurance product that, like whole life, builds up a cash value.
This means that these policies won't expire so long as the insured keeps paying the insurance premiums.
In most respects, vul insurance is a variation of whole life insurance. They function like other cash value life insurance policies in that the “term insurance cost” is deducted from the premium paid and them the rest of what’s paid goes into the “cash values”. Premiums are flexible and can be raised or lowered within certain limits.
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