Advantages of Variable Life Insurance

Variable Life Insurance is a type of permanent insurance which lets one target his/her premium to one or more separate investment funds.

With variable life insurance one can have a control on the investment of cash value.

Variable Life Insurance falls into 2 general categories: Variable Life and Universal Life.

The main benefit of these types of policy is that policy owner has the opportunity to achieve huge gains in terms of cash value which are tax-free. A variable life insurance policy is different from whole life policy due to 4 reasons:

• There is a new concept called separate account phenomena which is being presented to policy holder.
• The owner of the policy assumes the risk for the performance of the policy.
• A guaranteed death benefit would be provided to those based on assumed rate of interest.
• This product is considered a security vehicle which would add new rules & regulations.

In variable life insurance policy the insured would be required to pay a premium amount on a planned basis. However the insurance company in terms of variable life insurance places the premium payment to a separate account which is specific to the policyholder and the policyholder after that has the responsibility to direct the performance of that account.

Variable life insurance policies are very expensive. But they offer greatest flexibility in terms of control to policyholder. Due to this reason the policy holder makes a large amount of profit with large tax free lump sum amounts to the holders.