Variable Life Insurance Key Points
Variable Life insurance is a type of permanent life insurance that affords the purchaser more flexibility than a traditional Whole Life insurance policy. Within limits you can change premium amounts and death benefits over the life of the policy. As in Whole Life insurance Variable Life allows you to put a portion of your monthly premium into tax-deferred savings, however, Variable Life lets you choose the mix of where the money is invested.
Key points of Variable Life Insurance
- Variable Life is the only Permanent Life insurance policy that lets you chose where your money is invested, i.e.: into equity funds, a money market fund, bonds, stocks, or some combination of accounts.
- Remains in effect your entire life, so long as obligations are met.
- Variable Life is considered an investment product and is sold only by prospectus.
Being able to decide on where you money goes makes the potential rate of return on a Variable Life insurance policy the highest, however it is also the riskiest, as death benefit amount and the cash value rise and fall depending on the performance of your chosen investments.