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Friday, March 12, 2010
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Life Insurance 101
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Call us at (800) 940-3002
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Variable universal life insurance is permanent life insurance. As long as premiums
are paid, a death benefit is paid to the beneficiary. These policies are different
from variable life insurance policies because they offer the policy owner some flexibility
to change the premium payments and death benefit. The death benefit may be increased
or decreased, and the premiums can also be increased and decreased as well as skipped.
Variable universal life insurance policies may be purchased with one of two different
death benefit options. One is a level death benefit and the second is an increasing
death benefit. In addition, these policies accumulate cash values on a tax-deferred
basis with the potential for higher rates of return than traditional whole life
policies. The cash values of variable universal life insurance policies vary with
the investment results of funds chosen by the policy owner. The policy owner is
given a choice of investment options which are usually stock,
bond and money market funds. Unlike universal life insurance policies which have
guaranteed cash values, the cash values of variable universal life insurance policies
are not guaranteed. The cash values of variable universal life insurance policies
can be used for a variety of options:
- The policy can be surrendered at anytime for the cash surrender value.
- The policy owner can take out a loan and use the cash value as collateral.
- The cash values may be used to pay premiums for a certain period of time.
- The cash surrender value can be used for retirement income.
Variable universal life insurance policies are valuable because they can provide
permanent protection and may accumulate cash values; however, these policies carry
more risk than traditional universal
life insurance policies. Individuals considering purchasing a variable universal
life insurance policy should be experienced investors in equity investments.
The cash values of variable universal life insurance policies may also be affected
by a life insurance company's future performance. Some factors that influence a
life insurance company's performance are expenses and mortality experience.
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Return of Premium (ROP) Term Life Insurance |
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Whole Life Insurance |
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Universal Life Insurance |
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Variable Life Insurance |
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Variable Universal Life Insurance |
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Second-to-Die or Survivorship Life Insurance |
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