Variable Universal Life Insurance (VUL)
The features of Variable Universal Life Insurance are a blend of variable life and universal life. It provides you with the flexibility to adjust your premium payment and has two death benefit options:
- A level benefit equal to the policy’s original face amount, or
- A variable benefit that is equal to the original face amount plus any existing policy account value.
VUL has life-long protection with death benefits and offers a range of investment choices in separate sub-accounts. This policy remains in place for the entire life of the insured individual unless the policy lapses or is cancelled. If you prefer more control over your premium investment allocation, are willing to accept the associated risks, and understand the volatility side of investing, this policy may be for you.
Variable Universal Life Insurance includes:
- Premium payments are flexible depending on your financial circumstances and after the initial payment is made
- Ability to select a payment schedule that fits your needs (annual, semi-annual, quarterly, or monthly)
- You can invest premiums in one or more underlying investment portfolios offering various levels of risk and growth potential
- Defined as an investment security and a prospectus must be provided to you before or at the time of your appointment
- Cash value earnings are tax-deferred and may go up or down depending on the performance of your investment choices
- You can increase or decrease the death benefit or face amount1
- Choice of two death benefit options
- Mortality rates, administrative expenses, and fees apply, and may possibly negatively affect your accumulated cash value should the insurance company’s investment portfolio underperform or premium payments are insufficient
Agents and representatives who offer a VUL are required to be securities registered and must provide a prospectus on the entire policy including fees, expenses, sales charges, and investment accounts to you before or at the time of the appointment.
1evidence of insurability is required if the face amount is increased
The cash value of a VUL policy is not guaranteed. The investment return and principal value of the variable subaccounts will fluctuate. Your cash value, and perhaps the death benefit, will be determined by the performance of the chosen subaccounts. Withdrawals may be subject to surrender charges and are taxable if your withdraw more than your basis in the policy. Policy loans or withdrawals will reduce the policy’s cash value and death benefit, and may require additional premiums payments to keep the policy in force.
All guarantees are based on the claims-paying ability of the issuing company.