Permanent life insurance comes in various forms, with features that set them apart. Some features of variable life and universal life insurance include cash value functions, growth and investment opportunities, and more. And while the cash value of universal life policies grows according to the insurer’s set interest rate, variable life differs. So when it comes to choosing a permanent life insurance policy catered to your needs, it’s essential to understand the basics of permanent life insurance, such as what is included and what is not included.
Shared Attributes of Variable Life and Universal Life
Permanent life insurance policies are very similar, so they fall under the same policy umbrella. While they do differ from one another in a few ways, their similarities include:
- Either form of the aforementioned permanent life insurance policies will last for a lifetime
- Policyholders enjoy guaranteed death benefits, a key feature of variable and universal life insurance policies.
- Cash value is a shared aspect of permanent life insurance policies, growing tax-deferred for universal and variable life policyholders.
Variable Life vs. Universal Life Insurance
It may come as a surprise, given they are both permanent life insurance policies, variable and universal life differ in how policyholders may utilize the cash value.
Variable life offers more predictable rates according to the sub-account chosen to grow cash value. On the other hand, universal life features unpredictable interest rates that are ever-changing with swings in the market.
Variable life premiums must be paid into an account, whereas a universal life features a less rigid payment system. For example, the policyholder may use cash value growth toward premium payment.
Making Your Final Purchase Decision
It’s important to note that permanent life insurance policies don’t provide the same investment and cash value control level compared to traditional investments, including mutual funds and stocks. While variable and universal life policies offer a cash value component, their growth differs depending on your policy. How these details impact your financial portfolio overall will also vary accordingly. It’s best to speak with a certified financial planner to discuss your life insurance needs if you have questions about this specific attribute of a permanent life insurance policy.
If you prefer a more predictable form of premium, variable life insurance offers a structure many policyholders enjoy. However, the flexible premium options set forth by universal life enable the policyholder to make payments with cash value instead. When you have specific investing needs a term life insurance policy cannot offer, turning to a variable life or universal life insurance policy can make all the difference. When it comes down to cash-earning potential, variable and universal life insurance offers financial upsides you won’t want to miss.
Contact Information:
Email: [email protected]
Phone: 8668727470
Bio:
Mark Zimmerman, Sr currently is the Managing Member of Aurifex Financial Group, LLC. Aurifex Financials mission is to help clients realize their vision of living life on their own terms by providing credit repair, financial counseling, insurance solutions, and money lending services. This is accomplished by using a holistic approach. After hanging up his uniform after 22 years of service in the military, Mark still had a desire to help others, so he created Aurifex Financial.
As part of Accredited Financial Counselor (AFC) credentials, Mark had to obtain and document over 1000 hours of helping others which was accomplished by helping hundreds through a local non-profit. As an independent Insurance Agency, Mark is licensed in property and casualty, home, business, health, Medicare, life, and annuity products.
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