A variable life insurance policy is a type of permanent life insurance policy, which provides a death benefit as well as an investment component.
The key elements of a variable life policy are flexible premiums, designated investments, tax-deferred cash values, and variable death benefits.
Flexible Premiums: With variable life insurance, you can choose how much to pay in premiums and when you need to pay them.
Designated Investments: With variable life, your premiums are invested into an account designated specifically for the policy. You have a choice of investment options, including stocks and bonds, mutual funds, and exchange-traded funds.
Tax-Deferred Cash Values: Your savings are tax-deferred, which means that your payments are not taxed until you withdraw them. This also means that you can grow your account faster than with an ordinary life insurance policy.
Variable Death Benefit: The death benefit of a variable life policy is not fixed. This means that it can fluctuate based on the performance of the account investments.
Overall, a variable life policy offers a combination of the safety of a life insurance policy with the potential for greater returns on investments. To make the most of the policy, you should understand all the elements of the policy and speak to a financial advisor to ensure that it fits your needs.