by Guest » Mon Nov 23, 2009 12:15 pm
A variable universal life insurance combines the benefits of a variable life insurance as well as universal life insurance policy. So, if your question is does a person have a life insurance policy that offers both benefits of a universal and variable life insurance then you can opt for variable universal life policy.
Advantages of variable universal life insurance
Variable universal life policies offer:
- Premium as well as death benefit flexibility.
- Tax-free investment earnings during the lifetime of the policy.
- Potential increase in cash value depending on the performance of the kind of underlying funds that you have.
- A crucial fencing against inflation depending on the performance of various securities market.
- Permission to withdraw or borrow money from the policy during your life time.
Disadvantages of variable universal life insurance
- VUL or variable universal life insurance is a more expensive type of policy compared to the other types.
- VUL insurance premiums are more expensive compared to the other types.
- You need to have a basic understanding of stocks, bonds and securities.
- You will be the one to be responsible for managing any core investment accounts.
- You may lose value since the success of such policies is dependent on the investments that you make.
Buying variable universal life insurance
Variable universal life insurance will be subject to market fluctuations. The returns on the invested cash values as well as the death benefits are not guaranteed. So you must be prepared for ups and downs when you have decided to buy this variable universal life insurance.
Now, you need to asses how much insurance you may need to secure the lives of your loved ones. Once you have done that, you can seek appointment with an experienced independent insurance agent. The agent will then explain the policy to you and offer different options from different companies. When you choose a policy, you must opt for a company that has high ratings from the major rating services like Standard & Poors, AM Best and the like.
Take a look at the investment goals of the funds that will be available and the respective management fees that is supposed to be deducted from your cash value.
Now, you need to asses how much insurance you may need to secure the lives of your loved ones. Once you have done that, you can seek appointment with an experienced independent insurance agent. The agent will then explain the policy to you and offer different options from different companies. When you choose a policy, you must opt for a company that has high ratings from the major rating services like Standard & Poors, AM Best and the like.
Take a look at the investment goals of the funds that will be available and the respective management fees that is supposed to be deducted from your cash value.
Does a person have a life insurance policy that combines the benefits of both variable life insurance as well as universal life insurance?
Posted: Tue Nov 24, 2009 05:12 am Post Subject:
Not wanting to sound glib, but you're describing Variable Universal Life. Is that what you were getting at?
InsTeacher 8)
Posted: Tue Nov 24, 2009 07:09 am Post Subject:
I'd thank the site moderators for giving a proper title to my thread. But, do we really have life insurance policies that could be termed as variable universal life policies?
I was simply looking for a policy that offers flexible coverage with an investment option.
Posted: Tue Nov 24, 2009 08:47 pm Post Subject:
Yes...Variable Universal Life insurance offers the separate account investment feature with a flexible premium.
InsTeacher 8)
Posted: Tue Nov 24, 2009 09:59 pm Post Subject:
So you get a % return on your premiums?
How exactly does that work - do they just charge you more for the same level of cover?
Posted: Wed Nov 25, 2009 12:25 am Post Subject:
Not exactly, the policy is essentially a yearly renewable term product with an investment account tied to it. You'll pay a premium that covers fees and charges and the remainder goes into the investment account. You can put as much money as you want into the policy--of course you can turn the contract into a modified endowment contract if you put too much money in it.
The return you get is dependent on your investment account performance. As long as the cash component of the policy has a positive balance and the charges associated with the policy have been paid, the policy will remain in force.
Posted: Wed Nov 25, 2009 09:58 am Post Subject:
In a VUL insurance policy you'd have 2 death benefit options - variable and fixed. I guess the variable death benefit is worth a sum total of the cash value generated till death and the face amount.
Posted: Thu Nov 26, 2009 07:10 am Post Subject:
You could choose your own investment portfolio with vul policies. You'll not get this benefit with the universal life policies. You'll come across different investment options with different carriers but all of these policies would generally offer you investment options through stocks, securities, bonds and mutual funds. Under such circumstances, the death benefit and the cash value would depend on how your investment performs.
Posted: Thu Nov 26, 2009 08:12 pm Post Subject:
Never, ever, ever, ever buy a UL or VUL or EIUL policy without understanding what the cost of insurance will be every year. Also, don't sell one of these policies without understanding that also.
The COI won't be in the illustration and won't be in the prospectus.
Posted: Fri Nov 27, 2009 06:39 am Post Subject:
Never, ever, ever, ever buy a UL or VUL or EIUL policy without understanding what the cost of insurance will be every year.
Do you recommend any website wherein I may study more about the different elements of insurance cost. Or do you want me to get a detailed explanation from the agents?
Posted: Fri Nov 27, 2009 08:16 pm Post Subject:
They keep the cost of insurance hidden. The agent can get this information for you. If they hesitate, get a new agent. Don't confuse "cost of insurance" with "premium".
Add your comment