Variable Life Insurance

So what is variable life insurance? Variable life is not really suitable for new investors. To purchase variable life you should be somewhat of a savvy investor.

Read on for the reasons why…..

Just like all other Permanent Life Insurance Policies, with variable life, it is a cash value life insurance.

With policies such as whole and universal life, however, the life insurance companies are the ones taking on the risk.

With variable life YOU, decide where to invest your premiums and therefore are taking on the risk of losing or gaining.

You as the policyholder will select the investment accounts where you wish your premiums to be invested in. If your accounts don’t perform as expected or have poor returns then it is your cash value that may decline because of this.

The cash value in your policy is not guaranteed and changes with the performance of the investment accounts.

Read more about cash value life insurance.

With variable life, your premium is fixed and your face amount (death benefit) fluctuates over time depending on the performance of your investment account.

However, the face amount of your policy can never decrease below your original amount of insurance, so there is a guaranteed minimum death benefit.

About Variable Life Regulations

Variable life insurance is unique from all the other permanent policies because it is the only one that is regulated by the Securities and Exchange Commission (SEC) and the (NASD) National Association of Securities Dealers also watch over its sales and marketing. Because of the regulations it must also be sold with a prospectus.

It is regulated on a national level by (SEC) and (NASD) above as well as on a state level.

Whoever sells variable life must also be licensed by the state they are selling in and ALSO receive another license by the (NASD).

If you plan on purchasing a policy like this please talk to your financial advisor/agent about it to see if it is suitable for you as it is really for experienced investors.

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