Variable Universal Life

Variable universal life insurance (VUL) is life insurance protection with an investment component. VUL differs from various long-term financial alternatives in that it combines that characteristics of life insurance – a death benefit and tax advantages of life insurance with the growth potential of equity investing.

The mix of insurance protection and investment options offers policy owners the potential to help accumulate assets, typically preserve them from current taxes and eventually transfer them intact to one’s beneficiaries.

  • Although a premium schedule will be established at issue to correspond to the owner’s life insurance needs and goals, current premium payments may or may not be necessary to keep the policy in force
  • The policy’s face amount can increase or decrease according to the owner’s payments into the policy
  • The owner may typically take policy loans and withdrawals. Keep in mind, however, that loans and withdrawals will reduce cash values and death benefit, and will increase the chances that the policy will lapse
  • Policy account values in variable investment options will fluctuate. You may have a gain or loss when money is withdrawn. These values are not guaranteed and will increase or decrease daily depending on investment results of the subaccounts chosen
  • The main advantage of variable universal life is the potential ability of earning higher rates of return over a traditional whole life, universal life, or indexed life policy.
  • The main disadvantage of variable universal life policies is that the rate of return can fluctuate and even earn negative returns and the premiums may have to be increased as a result. While this can potentially be minimized by proper asset allocation, the impact of negative returns can have a dramatic effect on the overall structure and pricing.


Please consider the charges, risks, expenses, and investment objectives carefully before investing. Please contact an insurance professional and read carefully before you invest or send money.



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