Introduction to Variable Universal Life Insurance
Variable universal life insurance is one of the several different kinds of permanent life insurance that you can choose from. This type of permanent life insurance offers a configurable death benefit, a cash value, a selection of investments, and adjustable premiums. Variable universal life insurance, like the majority of permanent plans, provides lifelong protection since it is intended to last for the duration of your life, provided you continue to pay the required premiums.
What Are the Main Characteristics of Variable Universal Life Insurance?
Variable universal life insurance is a combination of the main characteristics of both universal and variable life insurance. The main characteristics are:
- Adjustable Premiums: You may postpone premium payments if your policy’s cash worth can support them. This can help you in the event of an emergency where you are strapped for cash.
- Death Benefit May Be Increased: You may adjust your insurance coverage as needed. This can be done by making a lump sum payment to boost your cash value or by increasing the death benefit.
- Borrow or Withdraw: Variable universal life insurance enables you to borrow against the cash value or withdraw assets. But be careful, a withdrawal or loan might lower your death benefit or result in a tax obligation.
- Variable Risk and Investment: Variable universal life allows you to invest in sub-accounts with a choice of possibilities. These investments are related to financial markets, so your policy’s value may rise and fall with them. The risk may diminish your cash value. Your death benefit may also be diminished if your policy ends.
Who Should Get Variable Universal Life Insurance?
Is variable universal life insurance the right life insurance for you? It is ideal if you want flexibility. But this also means you need to evaluate investment performance and shift cash over time. Investing risks might diminish a policy’s cash value. So think carefully before choosing this type of permanent life insurance.
