Variable Life Insurance
Variable Life is a type of life insurance where the death benefits and cash values depend on the investment performance of one or more separate accounts.
The variable part of a variable life insurance policy is the face amount of the death benefit. A variable life insurance policy is written with a specific death benefit amount, which is the least guaranteed amount that will be paid as death proceeds. Future death benefit amounts could increase or decrease by the return on the investment portion of a variable life insurance contract.
Variable Life Insurance Benefits
Variable life insurance accounts may be invested in mutual funds or other investments allowed under the variable life policy by the insurer. Variable life insurance proposals should include a prospectus from the company. When buying a variable life insurance policy please study the prospectus carefully.
With a variable life contract you will have a higher death benefit and cash value if the underlying investments do well. Your benefits and cash value will be lower or may disappear if the investments under the variable life insurance contract you chose didn't do as well as you expected. You may also pay an extra premium for a guaranteed death benefit within a variable life insurance policy.