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Variable Life Insurance: The Good and The Bad

Variable life insurance is a great investment for select individuals. It is a whole life insurance option, which pays out benefits when the insured individual dies.

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When you pay your premiums, a portion of the money for a variable life insurance policy is put in another account and designated for investments like money market funds, equity funds, bond funds or some combination of these.

Not everyone will want or need variable life insurance. Therefore it is important to take the time to learn about the different types of life insurance available to you. If you have decided that whole life coverage is a good option for you, variable life insurance may help you afford it more easily or may offer you other advantages that appeal to you. However, there are some risks too.

Variable Life Insurance: Why It Is a Good Choice

If you want a flexible form of life insurance that gives you investment options, variable life insurance is for you. Variable life insurance:

  • Provides lifelong protection for your beneficiaries
  • Has a cash value, which is important to many people
  • Provides an opportunity to earn money from your investments tax-free, which can be put towards your premiums.

If you enjoy the idea of participating in a variety of investment opportunities, variable life insurance lets you do so without tax implications.

Variable life insurance adapts to the changes you want to make. If you want to alter your death benefits or the amount or schedule of your premiums, you can do so, as long as you respect the terms and conditions of the policy.

Variable Life Insurance: Why It Is A Poor Choice

The investment portion of a variable life insurance policy leaves you vulnerable to loss. If the market does not grow, the money you were counting on to help you pay your life insurance premium is not there. If you happen to be unable to pay premiums or postpone payments, the value of the policy will decline, as will the death benefits.

Even though there is a possibility that your benefits or cash value will decline because of poor investment performance, there are safeguards in place that prevent you from dipping below a preset level.

Another negative with variable life insurance is that you cannot access the cash value of it while you are still alive. The face amount of this type of policy cannot be altered. If you want more coverage you will need to purchase a different policy. If you need fewer benefits because you have gotten to a point in life where fewer people depend on you, you are out of luck.

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Buy Variable Life Insurance Now

In order to get quotes on your variable life insurance needs quickly and easily, let an online quote tool do the work for you. In order to get started you input your zip code and the tool will ask you a series of questions associated with life insurance. The information gathered is then submitted to a variety of life insurance providers in your state. In no time you get quotes you need from quality companies.

Take the time to carefully compare rates, terms and the companies themselves. It is important to read the fine print in order to be sure you are comparing policies that are similar. You must also take the time to investigate the insurers offering you policies.

Since life insurance is generally a long term investment, you want to choose a company that is solid and will be around in the future when your policy benefits come due. Therefore you should get information from one of the independent insurance ratings firms, like Moody’s or A.M. Best on the financial standing of the firms you are considering. These companies assign letter grades to insurers based on a variety of factors and are reliable indicators.

You should also look at the company’s record in terms of customer service. Do a search for online reviews and complaints from those who received benefits from the insurers you are considering getting a policy from. Practically all insurance companies are wonderful to deal with as you pay premiums regularly, but when they have to pay out benefits, the service may not be as friendly or prompt. Therefore you need to read reviews from beneficiaries not the insured.

Get started with the shopping around process by inputting your zip code and comparing various life insurance quotes now!

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