Variable life insurance is a type of permanent life insurance that allows policyholders to invest their premium payments in a variety of underlying investment options, such as mutual funds, stocks, and bonds. The performance of these investments determines the growth of the policy’s cash value, which can be used to provide a death benefit to beneficiaries or be accessed by the policyholder for other purposes.
Here are some of the key features of variable life insurance:
- Investment flexibility: Policyholders have the flexibility to choose from a variety of investment options, including stocks, bonds, and mutual funds. This allows them to tailor their investment strategy to their individual risk tolerance and financial goals.
- Potential for high returns: The potential for high returns is one of the main attractions of variable life insurance. However, it is important to note that there is also the potential for losses, as the performance of the underlying investments is not guaranteed.
- Tax advantages: The cash value of a variable life insurance policy grows on a tax-deferred basis, meaning policyholders do not have to pay taxes on the investment gains until they withdraw the funds. This can help policyholders grow their wealth over time.
- Death benefit: Variable life insurance policies also provide a death benefit, which is paid to beneficiaries when the policyholder dies. The death benefit amount is typically equal to the premiums paid plus the accumulated interest and investment gains.
Variable life insurance can be a good option for people who are looking for a life insurance policy with the potential for high returns and tax advantages. However, it is important to carefully consider the risks involved before purchasing a policy.
Who Should Consider Variable Life Insurance?
Variable life insurance can be a good option for people who:
- Are looking for a life insurance policy with the potential for high returns.
- Have a long-term investment horizon.
- Are comfortable with the risk of losing money in the stock market.
- Are willing to pay higher premiums than for other types of life insurance.
Who Should Not Consider Variable Life Insurance?
Variable life insurance may not be a good option for people who:
- Need a life insurance policy with guaranteed death benefits.
- Have a short-term investment horizon.
- Are not comfortable with the risk of losing money in the stock market.
- Cannot afford to pay higher premiums.
Choosing a Variable Life Insurance Policy
When choosing a variable life insurance policy, it is important to consider the following factors:
- The investment options available.
- The fees and charges associated with the policy.
- The surrender charges.
- The death benefit.
- The financial strength of the insurance company.
It is also important to speak with a financial advisor to get personalized advice on whether variable life insurance is right for you.
Watley Insurance Group Can Help
If you are considering variable life insurance, Watley Insurance Group can help you understand the different options available and choose a policy that meets your needs. We have a team of experienced agents who can help you assess your risk tolerance and investment objectives and recommend a policy that is right for you.
To learn more about variable life insurance or to get a quote, contact Watley Insurance Group today.
We are here to help our neighbors in the Ark-La-Tex area and Shreveport, Louisiana.