subject: Advantages and Disadvantages of Variable Life Insurance – Make an Informed Decision [print this page] Advantages and Disadvantages of Variable Life Insurance Make an Informed Decision
The purpose of all kinds of life insurance is to provide a financial safety net for your family once you pass on. The ability to know you are leaving your family in a stable situation when you pass away is something that will offer you great peace of mind during the years left in your life. Variable life insurance is one type that may be of interest to you. It is a form of permanent life insurance that will provide financial security to your family in the event of your death. This is generally considered the most expensive form of cash value life insurance because of the amazing benefits it has.
Instead of simply paying monthly premiums for an eventual death benefit for your family, you are allowed to put a portion of your premium into separate investment funds including stocks, bonds, money market funds, and equity funds. This means, if you are very interested in variable life insurance, you should know quite a bit about investing first. Because of the way in which variable life insurance functions, it actively becomes a way to both invest your money and make sure your family benefits from it when you pass on.
While these advantages are great, there are disadvantages that must be addressed as well. Obviously, because your money is at stake when you invest in anything, you have the potential to lose much of the money you would have been able to leave behind for your family once you pass on. If your investment funds perform poorly, you could end up not having enough money to pay the expensive premiums to keep the policy from being terminated. In the very least, you will see your cash value and death benefits decline before your account is closely completely. Therefore, if you are serious about purchasing a variable life insurance policy, you should be confident in your investing skills and be willing to risk a little money in the hopes that you can make a great return.
The ability to leave your family with enough money to buy a new house, fund a college education, and pay for a wedding is a dream that many aging breadwinners have for their families. You can make this dream a sure reality by putting your money into a life insurance policy you can trust to provide your family with what they need after you have passed on.
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