If you have dependents to support, then it's a good idea to ensure that you have the life insurance that you need. However, there are a variety of types of life insurance available to you, including variable life and variable universal life insurance.

The Top Line

  • Life insurance is essential for anyone who has dependents to support who would need an income, should the policyholder pass away.
  • Life insurance will help to support your family in the event that anything untimely happens to you.
  • There are a variety of types of life insurance, which sometimes makes it difficult to know which one you should choose.
  • Two of the most common types of life insurance are variable life and variable universal life insurance.
  • We're going to cover each of these types of insurance and make sure that you understand what each one is and whether they are the right option for you.

What is Variable Life Insurance?

The first type of life insurance to understand is variable life insurance. Variable life insurance is a type of insurance policy that invests the amount that is paid into the policy into a portfolio that is managed by employees at the insurance company. This is an actively managed portfolio, but the great thing about it is that you can select what type of investment you want the policy to be in, such as stocks, money markets, bonds, etc.

When a variable life insurance policy is cashed in, it can come in the form of many different assets. The policyholder could choose to have it continue to pay out a set amount or provide cash to the beneficiary. The big risk with variable life insurance policies is that the assets could fluctuate in value, meaning it is impossible to predict exactly how much the beneficiary will receive when the time comes. However, the investment aspect of variable life insurance is often looked upon favorably because it could also drastically increase in value over time, providing a compounding effect that amplifies the efforts that the policyholder has made to pay into the policy.

What is Variable Universal Life Insurance?

As you may have guessed, variable universal life insurance, sometimes referred to as VUL, combines the aspects of variable life insurance and universal life insurance to create a more flexible and stable option for those who are not as risk-averse. This type of life insurance policy will give the policyholder the option to invest with the insurance policy as well as have a guaranteed death benefit universal life insurance option.

Which Option is Right For You?

As with many investment and insurance products, the answer to this question depends on your individual and unique needs as a policyholder. If you want to enjoy the swings of the market more and do not have a problem with the benefit always changing in value, then a variable life insurance policy could be right for you. If you are less willing to take on some risk and instead want more stability, then a VUL policy could be the choice that you've been looking for.