Variable Life Insurance

Variable life insurance is a type of permanent life insurance that provides a death benefit and a cash value component. Variable life insurance policies are similar to universal life insurance policies in that they offer flexibility, but they differ in how the cash value component is invested.

With variable life insurance, the cash value component is invested in a variety of investment options, such as mutual funds or stocks. The value of the cash value component can fluctuate depending on the performance of the underlying investments. This means that the cash value component can potentially grow faster than the cash value component of a universal life insurance policy, but it also carries more risk, as the cash value component can decrease in value if the underlying investments perform poorly.

Variable life insurance policies typically offer a wide range of investment options, allowing you to tailor your investments to your risk tolerance and investment goals. Some policies may also offer a guaranteed minimum death benefit, which ensures that your beneficiaries will receive at least a minimum death benefit, even if the cash value component decreases in value.

Like universal life insurance policies, variable life insurance policies can be complex, and it’s important to carefully review the terms of the policy before purchasing. Some policies may have surrender charges or other fees that can affect the value of the policy. Additionally, the performance of the underlying investments can have a significant impact on the value of the cash value component and the death benefit, so it’s important to understand the risks associated with variable life insurance.