You can get two different kinds of variable life policies: a straight variable policy, in which your premium is fixed and the death benefit rises and falls as the investments go up and down, and a variable universal policy, in which the premiums vary, the death benefit is either fixed or increases (just like a normal universal life policy), and your cash value goes up and down with your investments.
With the straight variable, if the value of your investment exceeds a specified minimum (usually 4 percent), the death benefit goes up by that amount. If your investment’s value decreases, so does your death benefit. And with most policies, your death benefit will never decrease below the original face value.
If you’re considering purchasing a straight variable life insurance policy, make certain it has a guaranteed death benefit.
With the straight variable, if the value of your investment exceeds a specified minimum (usually 4 percent), the death benefit goes up by that amount. If your investment’s value decreases, so does your death benefit. And with most policies, your death benefit will never decrease below the original face value.
If you’re considering purchasing a straight variable life insurance policy, make certain it has a guaranteed death benefit.
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