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What is variable universal life insurance?

Updated: 9/11/2023
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Wiki User

9y ago

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Variable universal life insurance combines the flexibility of a universal life insurance with the investment account features of a variable life insurance.

Like variable life insurance, variable universal is considered a security. It can only be sold by agents who have passed the National Association of Securities Dealers (NASD) exam.

Answer

Variable life insurance allows you to control your portfolio of investments that is part of the cash value component of a whole life insurance policy. This could include stocks, bonds, or funds. As a result of this freedom, this is the most expensive type of insurance available in the market. Opt for such a policy only if you are completely confident about investing in the markets. While the risks may obviously be higher as there is no guarantee on your savings, the value benefits are also much more than any other insurance policy available.

Answer

Variable Universal Life insurance is permanent life insurance that has a cash value feature in it. The cash value is invested in a small selection of portfolios. Since it is invested, there is no guarantee interest and it may lose value. When you pay your premiums, you are paying for three things: The insurance, the cash value, and investment fees. If you know anything about mutual funds, mutual funds have their own annual operating expenses. Since these mutual funds are invested in a life insurance policy, you are paying more than 5% of annual expenses. Therefore, you will get a low rate of return on your cash value.

Every year, the cost of the insurance goes up. The insurance part of the policy is annual renewable term. That means more of your premiums is going to the insurance and less toward the cash value. Eventually, you will have to pay higher premiums in the future. If you don't, the policy will eventually lapse as the cash value is depleted.

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9y ago
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13y ago

Variable Universal Life Insurance builds cash value over time. The rate of increase varies, because the money is invested in stocks and other options.

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Related questions

Do you need a security license to see variable universal life insurance?

Yes. To sell variable universal life insurance you will need a Series 63 Securities License, a variable life insurance license, and a regular life insurance license.


Four Types Of Permanent Life Insurance?

universal variable universal whole variable whole


Can variable universal life insurance be converted into a fixed account?

Variable universal life insurance is not an account. It is a policy that invests in separate accounts in an attempt to earn higher returns than a fixed policy. A variable universal life insurance policy can be converted into a different type of life insurance policy but not a different kind of account.


What is special about variable universal life insurance?

What's special about variable universal life insurance is that it builds cash value. You can read more about this type of insurance online at the Wikipedia website. Once on the page, type "Variable universal life insurance" into the search field at the top of the page and press enter to bring up the information.


What products are offered by agents under life insurance?

Typical products offered by agents in this market include: whole life products; term products, such as universal, variable, and universal variable life insurance; and annuities


What does it cost to borrow from a variable universal life insurance policy?

the interest rate is stipulated in writing in the life insurance policy


What type of life insurance policies does MetLife provide?

There are several types of life insurance policies available at MetLife including Term Life, Whole Life, Universal Life, Variable Universal Life and Survivorship Life.


What are some highly rated insurance companies that offer variable universal life insurance policies?

Variable life insurance is a smart investment for you and your family. Two of the more reputable providers for this type of insurance are Metlife and Nationwide.


Which combines investment choices with Term Insurance?

UVWL- Universal variable whole life ^_^


What is the name of the life insurance policy that only a securities broker can offer?

Variable Universal Life (VUL)


What are the premiums for variable universal life insurance?

The premiums will vary depending on your age and other factors. I would speak with an insurance professional.


What is the difference between variable life insurance and universal life?

Nothing is the difference. Universal Life can be fixed or variable. Variable simply means that the cash value is invested in stocks or mutual funds to create a fast (sometimes slower) cash value. With a fixed Universal Life product, the cash value can be linked to an interest rate or an Index.