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Variable Universal Life Insurance

Variable universal life insurance is a type of insurance that builds up cash value. Unlike traditional whole life policies that offer guaranteed, fixed rates of return, variable universal life has an investment component where some of your premiums are invested in stocks and bonds through separate accounts.

"Universal" refers to the fact that the premium is somewhat flexible. You can add more money to the separate accounts, but there is risk because the returns are not guaranteed. If you choose good investments in your separate accounts, then a variable universal life policy can offer great returns. If returns are dismal then you could face increased premiums in the next year because there needs to be enough there to fund the expenses of the policy each year.

Another way to look at this policy is to think about the phrase "buy term and invest the difference." That is essentially what the insurance company is doing for you when you purchase a variable universal life policy. Your premium pays for an underlying guaranteed death benefit and there is also money being invested in stocks, bonds, and mutual funds.

Get a free no obligation quote today and compare multiple quotes from the nation's highest rated carriers. Remember that all life insurance carriers have different rates, so it pays to compare.