For people who want to be more in control of their investment, variable life is the probable option. Benefits will vary based on how well stocks perform which makes it one of the more expensive ways to insure an individual. This way however does provide the beneficiary with permanent protection.

Federal securities laws regulate variable life insurance because it is considered an investment policy, unlike other life insurance. The policy holder must receive a prospectus from the insurance company, only then can they choose from the portfolio offered to invest in money market funds, equity, bond, or the stock market. Only a part of the premiums may be applied to the different funds.

Earnings from investments are not taxed until such time as the policy is surrendered. If these earnings are sufficient enough, some can be diverted toward paying the premiums on the policy.

The Downside to Variable Life Insurance

There are many variables that can affect what your beneficiary will receive and what will need to be paid for the life of the policy, which is why this is called “Variable” life insurance.

When stocks perform poorly, there is always the chance that the policyholder must continue to pay high premiums, even at a time when that might be difficult. The policyholder does not have the option to withdraw cash from the accumulated value of the policy.

With the stock market in recession, variable life insurance is certainly not as attractive an option as it might have been ten years ago. Poorly performing stocks can lead to little if any cash value and policyholders may need to pay high premiums on into their retirement years.

Obtaining several life insurance quotes may be a wise decision if you are considering variable life insurance. Additionally, the prospectus the insurance company gives you may be weighted somewhat to give very good possibilities for investments, which may not pan out.

Term Life Advantage over Variable Life

These two policies do not have anything in common. They are designed for different things because term life insurance is only to cover a person’s beneficiaries in case of their death; nothing more. The policy is only good for a set time frame and then it is not applicable.

Term life’s lower premiums make it possible to invest more money into whatever markets a person chooses. For the person who will dedicate themselves to taking the money saved from permanent life insurance and putting it in savings or a retirement fund, there is a very good chance the capital value will be higher by retirement than it would be with a variable life insurance policy.

My Insurance Expert will help you find term life insurance that fits all of your individual needs. The world of life insurance doesn’t have to be difficult. With the right advisor you can give your family the protection they need and have peace of mind.