The amount of your death benefit with a variable life policy varies but is typically never below the face value. If your investments go up, so does your death benefit. If it decreases — well, so does your death benefit. In fact, that’s one of the biggest dangers of this kind of policy.
If your investments go down, so, too, does your death benefit! And remember, you’re buying life insurance not as an investment but to protect your survivors if you die. Consequently, some insurance professionals are wary of this type of insurance. However, a variable life policy with a minimum guaranteed death benefit is a whole different story, at least as far as protection goes. With a guaranteed death benefit, variable life can be excellent insurance policies because if the investments are successful, the cash value can go up much more than a policy with a fixed rate of return.
If your investments go down, so, too, does your death benefit! And remember, you’re buying life insurance not as an investment but to protect your survivors if you die. Consequently, some insurance professionals are wary of this type of insurance. However, a variable life policy with a minimum guaranteed death benefit is a whole different story, at least as far as protection goes. With a guaranteed death benefit, variable life can be excellent insurance policies because if the investments are successful, the cash value can go up much more than a policy with a fixed rate of return.
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