Variable Life Insurance
Overview
Variable life insurance is a type of permanent life insurance that combines a death benefit with a savings component, which can be invested in various sub-accounts, similar to mutual funds. This type of insurance offers the potential for higher returns based on the performance of the investments, but it also comes with greater risk compared to other types of permanent life insurance.
Key Features
Investment Options: Policyholders can allocate the cash value to a variety of investment options, such as stocks, bonds, and money market funds.
Flexible Premiums: Premium payments can be adjusted within certain limits, allowing for greater financial flexibility.
Adjustable Death Benefit: The death benefit can be increased or decreased, depending on the policyholder's needs and the policy terms.
Cash Value Accumulation: The cash value grows based on the performance of the chosen investments, offering the potential for higher returns.
Policy Loans: Policyholders can borrow against the cash value of the policy, though outstanding loans and interest will reduce the death benefit.
What Variable Life Insurance Covers
Death Benefit: Provides a lump-sum payment to the beneficiaries upon the insured's death. This benefit can be used to cover expenses such as funeral costs, outstanding debts, and living expenses for dependents.
Cash Value: The policy's cash value can be accessed by the policyholder through loans or withdrawals, providing financial flexibility.
Exceptions and Exclusions
Investment Risk: The cash value is subject to market risk, meaning it can increase or decrease based on the performance of the investments.
Non-Payment of Premiums: The policy may lapse if premiums are not paid, resulting in the loss of coverage.
Suicide Clause: Most policies include a suicide clause, which excludes coverage if the insured dies by suicide within a specified period, typically the first two years of the policy.
Misrepresentation: Coverage may be denied if the policyholder provides false or misleading information on the application.
Factors Affecting Premiums
Age: Younger individuals typically pay lower premiums.
Health: Current health status and medical history significantly impact premiums.
Gender: Women often pay less than men due to longer life expectancy.
Smoking: Smokers generally face higher premiums.
Coverage Amount: Higher coverage amounts result in higher premiums.
Investment Performance: The performance of the chosen investments can impact the cash value and overall cost of the policy.
How to Get a Quote
To get a variable life insurance quote, visit our general insurance quote form or use our online chat option for personalized assistance.
Tips to Save Money
Buy When You're Young: Premiums are lower when you're younger.
Compare Quotes: Shop around and compare quotes from multiple insurers to find the best rates.
Maintain a Healthy Lifestyle: Improving your health can lead to lower premiums.
Avoid Smoking: Quitting smoking can significantly reduce your premiums.
Evaluate Investment Options: Carefully consider the investment options and their associated risks to manage costs effectively.