What is variable life (VL) insurance, and how is it different from universal life (UL) and participating whole life (WL)?
Variable life insurance is a type of fixed-premium whole life insurance policy where changes in the policy’s cash values and death benefits are directly related to the investment performance of an underlying pool of assets. Policy owners typically can choose among several investment options as to where the assets backing the policy’s cash values will be invested. The various investment options offered in the contract generally possess different risk/return relationships and frequently include a money market fund, a bond fund, and one or more common stock funds. Although the policy’s death benefit is directly related to the actual performance of the invested assets, the policy may prescribe that the death benefit will not fall below a minimum amount (usually the initial face amount) even if the invested assets depreciate in value by a substantial amount. Because the policy owner assumes all of the investment risk, there is no similar “floor” below which cash values may fall. In recent y
Variable life insurance is a type of fixed-premium whole life insurance policy where changes in the policy’s cash values and death benefits are directly related to the investment performance of an underlying pool of assets. Policyowners typically can choose among several investment options as to where the assets backing the policy’s cash values will be invested. The various investment options offered in the contract generally possess different risk/return relationships and frequently include a money market fund, a bond fund, and one or more common stock funds. Although the policy’s death benefit is directly related to the actual performance of the invested assets, the policy prescribes that the death benefit will not fall below a minimum amount (usually the initial face amount) even if the invested assets depreciate in value by a substantial amount. Because the policyowner assumes all of the investment risk, there is no similar “floor” below which cash values may fall.
Variable life insurance is a type of fixed-premium whole life insurance policy where changes in the policy’s cash values and death benefits are directly related to the investment performance of its underlying assets. Policyowners typically can choose among several investment options for the assets backing the policy’s cash values. The various investment options offered in the contract generally possess different risk/return relationships and frequently include a money market fund, a bond fund, and one or more common stock funds. The policy prescribes that the death benefit will not fall below a minimum amount (usually the initial face amount) even if the invested assets depreciate in value by a substantial amount. Because the policyowner assumes all of the investment risk, there is no similar “floor” to protect the cash values. Variable universal life (VUL) insurance has recently become a more popular product than VL.
Variable life insurance is a type of fixed-premium whole life insurance policy where changes in the policy’s cash values and death benefits are directly related to the investment performance of its underlying assets. Policyowners typically can choose among several investment options for the assets backing the policy’s cash values. The various investment options offered in the contract generally possess different risk/return relationships and frequently include a money market fund, a bond fund, and one or more common stock funds. The policy prescribes that the death benefit will not fall below a minimum amount (usually the initial face amount) even if the invested assets depreciate in value by a substantial amount. Because the policyowner assumes all of the investment risk, there is no similar “floor” to protect the cash values. Variable universal life (VUL) insurance has recently become a more popular product than VL.
Variable life insurance is a type of fixed-premium whole life insurance policy where changes in the policy’s cash values and death benefits are directly related to the investment performance of an underlying pool of assets. Policy owner’s typically can choose among several investment options as to where the assets backing the policy’s cash values will be invested. The various investment options offered in the contract generally possess different risk/return relationships and frequently include a money market fund, a bond fund, and one or more common stock funds. Although the policy’s death benefit is directly related to the actual performance of the invested assets, the policy prescribes that the death benefit will not fall below a minimum amount (usually the initial face amount) even if the invested assets depreciate in value by a substantial amount. Because the policy owner assumes all of the investment risk, there is no similar “floor” below which cash values may fall. In recent yea
