Variable Life Insurance

That depends on your financial goals, budget, and unique circumstances. Like all permanent life policies, variable life is generally more expensive than term life insurance. If you’re just looking for a death benefit, term life is probably a better fit.

Since your cash value depends on the performance of the market, you have the potential to earn more with variable life insurance than whole life insurance, where your cash value grows based on a fixed rate. On the flip side, your cash value could earn less or even go to zero because of fees and low market performance. Ultimately, the right policy depends on your budget, financial goals, and risk tolerance. A life insurance agent can help you find a policy that meets your needs.

All permanent life insurance plans offer guaranteed, lifelong protection and a cash value component, so the right choice comes down to flexibility and the type of cash value you’d like to have.

• Universal life insurance: With universal life, your cash value increases based on a variable interest rate, like a savings account. You can make flexible premium payments within a set amount and change the guaranteed death benefit if you need to, making these plans a good fit for people whose financial needs may change over time.
• Whole life insurance: Your premiums and death benefit remain the same throughout the policy, and your cash value will grow based on a predetermined schedule.
• Variable life insurance: With variable life insurance, you can choose from two options: whole and universal variable life insurance. Whole life insurance premiums and your guaranteed death benefit stay the same throughout the policy, while universal life insurance offers flexible premiums and the ability to change your death benefit. In both cases, you invest your cash value in sub-accounts, instead of receiving a guaranteed rate of return.

Your cash value is meant to be available for use as needed during your lifetime. Once you die, your cash value typically goes back to the insurance provider and your beneficiaries receive the remaining death benefit.

Over the years, your policy’s cash value can eventually build up to the full value of your death benefit. Once that happens, you receive the cash value and your policy comes to an end. Most permanent life insurance plans are designed for this to happen when you turn 100. This can get complex, so talk to an agent about your options.

A medical exam may be required to secure a variable life policy as it helps determine whether you qualify for life insurance and what your rates will be. eFinancial makes it easy and convenient for you to take your exam, at no cost to you. Learn more about taking a medical exam here.