Variable universal life insurance explained

If you have spent some time on learning different aspects of life insurance you've already observed that there are different types of life insurance policies each offering a certain set of pros and cons. It's good to have a diversity in such a complex concept as life insurance because we all have different needs and there are different ways to satisfy them. In recent years one particular type of life insurance has become very popular and a lot of people tend to get interested in it. We're talking about variable universal life insurance, and if you want to know the pros and cons of this policy type you will certainly find this short overview helpful.

Variable universal life insurance is the most recent development on the market of life insurance and as you can guess from the name represent a logic combination of variable and universal life insurance policies. It will best appeal to people who are used to controlling all of their financial activities and take certain risks to get the most benefits. Variable universal life insurance comes with the main feature of cash value build-up. But unlike typical universal life insurance you're free to distribute the cash value through different accounts and invest them in bonds and stocks as you please. The overall death benefit results from how good your stocks and bonds are doing on the market. You can get maximum benefits or really low incomes, that's the risk involved with this type of life insurance. However, the costs are varied and you don't have to pay a fixed premium all the time. In case the stocks and bonds aren't doing very well there's also a certain guaranteed amount of death benefits that will be paid out in case of policyholder's death. And assuming that variable universal life insurance is a permanent policy type it is a very attractive investment of your money.

Now, if you want as little hassle as possible with your life insurance variable universal policies are definitely not your cup of tea. If you want to be sure that there's a fixed benefit waiting for its time and you only need to pay periodically you should think of getting universal or term life insurance. But if you like to be in the driver's seat and control all your financial flows and take risks if necessary variable universal life insurance is the perfect tool to reach your goals.

How life insurance works »

How life insurance works

If you don't understand the purpose of life insurance make sure to read how it works.

Variable universal life insurance explained »

Variable universal life insurance explained

Learn more about variable universal life insurance policies and the benefits they provide.