The main features of a variable universal life policy are a mix of those typically found in variable life and universal life policies:

• Your premiums are adjustable.
• You have investment variety and risk.
• You can increase the death benefit.
• You can withdraw or borrow from it.

  Which statement describes a variable life insurance policy?

  A variable life policy invests premiums in a separate account holding a designated mutual fund, usually a growth fund. The insurance company gives a minimum guaranteed death benefit, which cannot fall below a set amount, regardless of how poorly the separate account performs.

  What is a typical variable life policy?

  A typical variable life policy will have several sub-accounts to choose from, with some offering upwards of 50 different options. The cash value account has the potential to grow as the underlying investments in the policy’s sub-accounts grow. At the same time, as the underlying investments drop, so may the cash value.

  What type of insurance is variable life insurance?

  Variable life insurance is a type of permanent life insurance policy., meaning coverage will remain in place for your lifetime so long as premiums are paid. Every variable life insurance policy has three primary components: Death benefit. Cash value.

  What is a variable life insurance plan?

  A variable life insurance policy is a contract between you and an insurance company. It is intended to meet certain insurance needs, investment goals, and tax planning objectives. It is a policy that pays a specified amount to your family or others (your beneficiaries) upon your death.

  What is a variable life insurance loan?

  Variable life insurance policies typically permit you to take loans on a portion of the policy’s cash value without incurring surrender charges or paying federal taxes. Policy loans typically have the following effects on your policy: They reduce your policy’s cash value. They may reduce your death benefit.

  Which is the best variable life insurance policy?

  A variable universal life insurance policy takes the best (or worst, depending on how you look at it) of the other two policies: you can adjust the premium and death benefit amount while investing the cash value in the policy’s sub-accounts.

  What happens if my variable life insurance policy lapses?

  A variable life insurance policy is designed to provide a death benefit or to help meet other long-term financial objectives. Policy lapse. If you do not maintain sufficient cash value to pay your policy fees and expenses, your policy may lapse. That means it will terminate without value and your beneficiary will not receive any death benefit.

  How are fees charged on variable life insurance?

  Each time you withdraw money from the policy’s cash value you can be charged a fee. This is often relatively small, around $25. If you take out a policy loan using the cash value as collateral, the insurer will charge interest on the loan. Riders are add-ons that can be used to alter the terms of the policy.

  Why is variable life insurance considered a Securities Contract?

  Variable policies are considered securities contracts because of investment risks. Variable life insurance is often more expensive than other life insurance products, like term life. Variable life insurance policies have specific tax benefits, such as the tax-deferred accumulation of earnings.