Variable life insurance is a type of permanent life insurance with a cash value component. Premiums paid for this type of policy are split between the death benefit and the cash value account.

What are variable insurance products?

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.

Is variable life insurance tax free?

Variable life insurance policies have specific tax benefits, such as the tax-deferred accumulation of earnings. Provided the policy remains in force, policyholders may access the cash value via a tax-free loan.

How does a variable universal life insurance policy work?

Flexible Premiums with Variable Universal Life Insurance. Variable universal life insurance policies have the cash value structure of variable life insurance, but you can use the cash value to pay premiums. You can also pay a larger amount in premiums if you choose to do so.

What’s the difference between variable and guaranteed life insurance?

These kind of policies usually specify two premium rates, a maximum guaranteed premium rate and a lower premium rate. Many people also refer to variable premium life insurance as non-guaranteed premium life insurance, flexible premium life insurance or indeterminate premium life insurance.

When do you pay variable premium life insurance?

When an individual purchases this policy, the insurance company charges the lower premium rate. In addition, the insurer also guarantees that the policyholder will pay the lower premium rate for a predetermined duration of time, usually a period from of one to10 years.

What are the different types of life insurance?

Permanent life insurance products include: universal life, indexed universal life, whole life, and variable universal life. Ensure loved ones will be provided for without term limits; premium payments are typically much higher than term insurance for this lifetime protection.