subject: Types of Variable Life Insurance Products – Reviewing the Different Types of Variable Life Insurance Products [print this page] Types of Variable Life Insurance Products Reviewing the Different Types of Variable Life Insurance Products
There are different types of variable life insurance products on the market today. One type is the simple variable life insurance policy. This works the same as most other permanent life insurance policies as far as providing an increasing cash value and being permanent instead of temporary. The biggest difference between policies is the way the product handles investments and how they pay out in the end. Here are some of the different types of policies available in this particular category.
The variable life insurance policy provides coverage of death benefits as well as an accumulating cash value. The policy takes monthly premiums. Part of the premium goes towards the insurance company costs for managing the account. The rest goes towards the cash value of the account. The policyholder indicates how the money should go into various investments. These accounts can consist of stocks, bonds, money markets, and other common investment options. With each month's premiums, the value of the policy increases. The ultimate value of the death benefit varies according to the value of the cash investments under it. This is the most common of the variable life insurance products on the market today.
Another kind variable life product is the variable annuity. Like the insurance option, the annuity provides a death benefit and an accumulating cash value. But, unlike the straight insurance option, the annuity provides a cash payout to the policy owner while the named insured still lives. The policy often requires a waiting period as the premiums build value before the annuity starts. Once the annuity kicks in, the policy owner can receive a monthly income for a particular period of time or a smaller amount for the life of the named insured. The policies can offer a fixed rate of return or a variable one related to the investments beneath it.
A different variable life insurance product is the single premium variable life product. This type of policy is an insurance policy that the policy owner opens with a single lump sum. There are no other premiums required for the life of the policy. It offers a faster rate of buildup in cash value. It gives death benefits like any other life insurance policy. The policyholder still has investment options. It brings tax advantages with tax-deferred growth and tax-free benefits upon the death of the named insured. Make sure to look over any policy before you invest.
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