What are variable and variable universal life policies?
Life Insurance as an Investment Variable insurance policies offer a number of professionally managed investment options in addition to the usual death benefits. Thus, whatever money accumulates in the investment account run by the insurance company can be used to invest in stocks, bonds and mutual funds. When the economy is doing well, this investment can produce strong growth. But, investments may also fall and the policyholder must accept the risk that, when the economy performs badly, the value of the policy may also fall. Indeed, there may be terms in the policy which require the insured to increase the premium if the overall value of the policy is to be maintained. This emphasizes the need to read the terms of the policy carefully before buying. Some insurance companies guarantee a minimum amount of death benefits. Others do not. As with whole life and universal policies, there is a cash value that may be borrowed or taken in full if the policy is surrendered. Should one or more l
