SuperTips
Home > SuperTips > Life Insurance > What is Flexible Premium Variable Life Insurance?
SuperTips Categories

Share This:

What is Flexible Premium Variable Life Insurance?

Life Insurance

Flexible premium variable life insurance, also called variable universal life insurance, is the most flexible type of whole life insurance policy you can buy. It is flexible both because you can choose how much you want to pay on a monthly basis, as long as you stay within a given rate, and because you can choose how you want the cash value portion of your policy invested.

What is Flexible Premium Variable Life Insurance?

Flexible premium variable life insurance is a type of whole life policy. This means that you are provided with coverage for your life and your death benefit will pay no matter when you die, as long as you don’t let the policy lapse.

Flexible Payments

Flexible premium variable life insurance differs from fixed premium life insurance because your premiums are flexible. Your policy will state a lower (and sometimes upper) limit for payments. You can make monthly payments anywhere within that range, while with fixed premium whole life insurance, you must pay the same amount each month. However, although premium payments are flexible, your death benefit and the cash value component of your policy may be affected if your payments are consistently low.

Investment Options

Flexible premium variable life insurance is also a type of variable life insurance. This refers not to the death benefit, which is fixed at a certain level as long as your premium payments are high enough. It refers to the cash value component of the policy.

Like other whole life policies, flexible premium variable life insurance has an investment component. Your premiums – again, as long as you choose to pay high enough payments- are for more than it costs to insure you. This added money you spend each month is invested, and you can borrow against the value or receive income during retirement. Many people like this component of flexible premium variable life insurance, since it is a form of forced retirement savings.

However, unlike a standard or universal life insurance policy, with flexible premium variable life insurance, you can choose what to invest the money in from a variety of options offered by your insurer. These options may include safer investments with a lower rate of return, or riskier investments with a higher rate of return.

Should You Buy Flexible Premium Variable Life Insurance?

Flexible premium variable life insurance may be the best option for you if you like the security of whole life and the investment component associated with a whole life policy, but if you also want a bit more flexibility as far as what you pay or what you invest in. Compare the premiums and coverage associated with a flexible premium variable life insurance policy before making your choice to ensure you get the best coverage for your money.

Find local Life Insurance Resources

: