Expenses of Owning Variable Life and Variable Universal Life Insurance

Expenses of Owning Variable Life and Variable Universal Life Insurance

Fees and charges on variable products tend to be somewhat higher than on traditional products because of the additional expenses of registering the contracts with the Securities and Exchange Commission and the additional administration, record keeping, and reporting responsibilities associated with the products. In contrast with traditional life products, the securities laws require extensive disclosure […]

What Kinds of Investment Funds are Offered Inside Variable Life Insurance Policies?

What Kinds of Investment Funds are Offered Inside Variable Life Insurance Policies?

For the more aggressive or knowledgeable investor, some companies now offer GNMA funds, real estate funds, and zero coupon bond funds. Some specialized funds such as small capitalization stock funds, market index funds, and funds that focus on specific sectors of the economy or industries (i.e., medical, high tech, gold, leisure, and utilities) are also […]

Our Experts Reveal What Variable Life and Variable Universal Life Illustrations Do Not Disclose

Our Experts Reveal What Variable Life and Variable Universal Life Illustrations Do Not Disclose

The principal source of information regarding a new policy, and something that should be reviewed every closely with your financial representative, is the policy illustration or ledger. The table above shows an annotated policy illustration. You should be told either verbally or in writing the following additional information: The separate investment account, which is analogous […]

How do Life Insurance Policy Funds Compare to the Performance of Mutual Funds?

How do Life Insurance Policy Funds Compare to the Performance of Mutual funds?

Numerous studies have measured the investment performance of mutual funds, but far fewer studies have assessed the performance of other institutional investors, such as the separate accounts of life insurance companies. However, one study examined the attractiveness of the stock portfolios of life insurance companies as an alternative investment to mutual funds. Using testing methods […]

10 Disadvantages of Variable Life and Variable Universal Life Insurance

10 Disadvantages of Variable Life and Variable Universal Life Insurance

Understanding the disadvantages of universal life insurance helps consumers make the most educated decision. Here are the 10 major disadvantages that should be considered when considering universal life: The policyowner bears all investment risk. VUL policies provide no minimum schedule of cash values as with UL or traditional whole life policies. Instead, cash values are […]

15 Advantages of Variable and Variable Universal Life Insurance

15 Advantages of Variable and Variable Universal Life Insurance

Understanding the advantages of universal life insurance helps consumers make the most educated decision. Here are the 15 major advantages that should be considered when considering universal life: Policyowners have control over how premiums and cash values are invested. They generally may allocate their investments as desired among a variety of mutual fund-type investment accounts. […]

When to Use Variable Life and Variable Universal Life Insurance

When to Use Variable Life and Variable Universal Life Insurance

Variable life products are most suitable for those individuals who want control over their cash values and need or desire increasing life insurance protection. They should have a basic understanding of investments and believe they are capable of making good investment decisions. They must be willing to bear the entire risk of their investments because […]

An Introduction to Variable Universal Life Insurance

An Introduction to Variable Universal Life Insurance

Variable Universal Life (VUL), which also is called flexible premium variable life or universal life II, is a combination of universal life and variable life. VUL offers policyowners the flexibility of universal life (UL) with respect to premium payments and death benefits. Specifically, VUL owners can: determine the timing and amount of premium payments (within […]

An Introduction to Variable Life Insurance

An Introduction to Variable Life Insurance

Variable Life (VL) insurance combines traditional whole life insurance with mutual fund type investments. Basically, it is a whole life policy where the policyowner may direct the investment of cash values among a variety of different investments. VL has a guaranteed minimum face amount and a level premium like traditional whole life insurance, but it […]

Alternatives to Variable and Variable Universal Life Insurance

Alternatives to Variable and Variable Universal Life Insurance

Variable Life (VL) is the insurance industry’s answer to the “buy-term-and-invest-the-difference” strategy. It provides investment options similar to those available from mutual funds, but wrapped within the insurance policy. The loadings and expense charges in the VL policy typically exceed the combined loadings and expense charges of a buy-term-and-invest-in-a-mutual-fund strategy. However, investment earnings within the […]