Life Insurance Types | Buying Life Insurance | Understanding Life Insurance | Glossary
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Variable Universal Life Insurance

Variable universal life insurance is a specific type of universal insurance policy that combines certain features of variable life and universal life all into one policy. A variable life insurance policy offers flexible premiums, an adjustable death benefit and a selection of investment accounts. Variable universal life insurance policies permit the policyholder to invest the cash value account into stocks, bonds or other assets. The cash value of the variable universal insurance policy may then grow at a higher rate than it would with a standard universal life insurance policy. However, these kinds of investments may also suffer losses. Some variable universal life insurance policies may offer a guaranteed low interest rate on a fixed account. Variable universal life insurance presents a greater growth potential, but has a higher market risk than other policies. A variable universal life insurance policy offers both insurance protection and investment opportunity. Features of Variable Universal Life Insurance Policies include:

Flexible premium payments - After you provide the initial payment for the policy, future premiums can be increased or decreased and can even be completely omitted if the cash value in the account is enough to cover the cost of the insurance premium for that month. While the premium rate is extremely flexible, it is subject to specific minimum and maximum amounts as set forth in your individual variable universal life insurance policy.

Investment Opportunities - Monthly premiums can be placed in one or more investment options. These options differ in risk value and growth potential. These investments provide tax-deferred earnings, long term growth potential and tax free transfers between investments.

Death Benefits - Death benefits include two options. The policyholder can either select a level benefit amount that is equal to the original face amount of the policy or select a variable benefit that is equal to the face amount as well as any cash value attached to the policy.

Advantages and Disadvantages of Variable Universal Life Insurance

Just as with all life insurance policies, variable life insurance has its advantages and disadvantages. The cash value of the variable universal life insurance policy can grow according to the performance of the policyholder's investment choices. This cash value may keep the face value of your policy from dissipating over the life of the loan as costs of living increase. A variable universal life insurance policy permits you to withdraw funds or borrow against the cash value.Variable universal life insurance policies offer flexibility in premium payments and death benefits. Variable universal life insurance is more expensive than most types of permanent life insurance. The policyholder is responsible for all managing of investment accounts and should have at least a basic understanding of securities, stocks and bonds. The growth of the policy is determined by the success of the investments that are made and may suffer a loss in value. The policyholder should be prepared and able to financially endure this loss.

Be Informed

If you are considering variable life insurance, you should consider all risks, expenses and investment goals carefully before committing to this permanent life insurance plan. Compare the various policies of different insurance companies and receive variable universal life insurance quotes from a trusted online company such as instead of going directly through an agent or broker. By searching for quote comparisons between providers at you can eliminate the added hassle of endless appointments and spending huge amounts of time looking over policies. The process can be made fast and simple. You can receive quotes from various life insurance providers all from the comfort of home and eliminate the need to make appointment after appointment with various companies.