You will have to monitor your own investment options, instead of the insurance company doing it for you. In addition to that, other cons of variable life insurance policies include: Ability to borrow from the policy – You can withdraw funds or take out a loan against the tax-deferred earnings.Ĭons Of Variable Life Insurance If you take out a loan or withdraw money greater than your cash value, your death benefit could be reduced.Īll permanent life insurance policies come with fees, but one of the downsides to variable life insurance is that it tends to have the highest fees out of all of the types of policies. Flexible death benefit – You have the ability to increase or decrease your coverage over time based on your specific insurance needs. The investments are tied to the financial market, so as the stocks go up, so does your cash value accumulation. Investment options with more growth potential- You can invest the cash value in dozens of sub-accounts that offer different investment options. Adjustable premiums – If you are having a tough month and cannot afford your life insurance premium, you have the ability to skip a payment or stop paying your premiums if the cash value of your policy can cover the costs. There are many reasons why people choose a variable life insurance policy, including: #Looking for abandoned life insurance plus#
Face amount plus cash value – This kind of policy will cost more, but your beneficiaries will receive your cash value in addition to the policy’s face value. Level death benefit – This means that the death benefit is equal to the face value of the policy when you purchased it. The death benefit for this type of policy is normally distributed in one of two ways: It is important to note, though, that if your investments do not perform well, you could end up losing money. If your cash value performs well, you can either use it to increase your death benefit, or withdraw it as cash to use when necessary. With variable life insurance, you can invest in different sub-accounts that resemble mutual funds. You have the freedom to monitor and make decisions on where to allocate your funds over time. Your premiums, which are the monthly payments you make to maintain your policy, will partially go towards the cost of insurance and fees, while the remainder will go towards the policy’s cash value, or a tax-deferred savings account, which you can invest in different sub-accounts that resemble mutual funds. The death benefit is what your beneficiaries will receive once you pass. Each policy will have three main components: the death benefit, the cash value, and the premiums. What Is A Variable Life Insurance Policy?Ī variable life insurance policy is a permanent policy that offers life-long protection as long as you pay your premiums. 
If this type of life insurance policy sounds interesting to you, you should first know exactly how the cash value works, how the death benefit is paid out, and how flexible these policies are. This is a type of permanent life insurance policy with a cash value that is based on how much you pay in premiums, the policy’s fees, and the performance of investment options. But while you’re looking into all of these types of policies, you might want to take a look at one that sometimes gets overlooked: variable life insurance. Shopping for the perfect life insurance policy? We get it, it can seem like there are endless options: you have to make the choice between term life insurance and whole life insurance, as well as research everything in between.
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