Variable Life Insurance Texas TX
Reader’s Question:
My neighbor here in Texas told me to get a variable life insurance. What exactly is it?
Tess
San Antonio, TX
Tess,
If you’re looking for a life insurance policy, you can try a variable life insurance which is a form of whole life insurance. With variable life insurance, your beneficiary will be provided permanent protection and security should the owner of the policy die. It also allows the policy holder to designate a portion of the premium dollars to a separate account which is commonly made up of different instruments and investment funds within the insurance company’s portfolio. These investment funds include bonds, equity funds, stocks, bond funds and money market funds. Variable life insurance is usually the most expensive type of cash value insurance. Depending on how the investments made with the policy performs, the amount of the death benefit and the cash value may go up or down.
However, most companies in San Antonio, TX will guarantee that the death benefit will not fall below the minimum specified in your policy. But a minimum cash value is usually not assured. And because of investment risks, variable life insurance is typically sold with a summary of the proposed investments.
A good thing about a variable life insurance is that you are allowed to participate in different types of investment options and until you surrender your policy, your earnings will not be taxed. You can also use the interest that you earn on such investments so as to decrease the amount that you will pay for the premiums. But when the funds that you invested performed poorly, the available money for paying the premiums will also decrease–which means that you will have to pay more to keep the policy running.
It is also possible that the cash value and the death benefit will be affected and may even decline.
Call a life insurance agent for more details or search the Internet to find out more about variable life insurance and what good it can do to you.
Tags: life insurance policy, variable life insurance, whole life insurance