What is the benefit of a variable life policy as compared to a universal life policy?
The variable death benefit is equal to the cash value at the time of death, plus the face value of the insurance. Unlike universal life insurance, this policy offers the freedom to invest in a preferred investment portfolio. The policyholder can be a conservative or aggressive investor.
What is the difference between universal and variable universal life insurance?
The key difference between variable and universal life insurance is the way the cash value grows. While variable life insurance gives you investment options to grow your cash value, the cash value in a universal life insurance policy grows at a rate set by the insurer.
What are the main differences between universal life insurance and traditional whole life insurance?
Whole life insurance offers consistent premiums and guaranteed cash value accumulation, while a universal policy provides flexible premiums and death benefits. You can borrow against the cash value of a whole or universal policy.
Which is are the benefits of variable universal life funds?
Just like Rod, a VUL policyholder can access the fund value in case of financial need. Unlike in traditional policies, this is treated as a withdrawal rather than a loan. Thus, the amount withdrawn does not incur any interest. Better yet, the amount withdrawn is not deducted from the face amount.
What is variable life insurance What are the advantages and disadvantages of variable life policies How can individuals avoid the high fees of variable life insurance?
An advantage of variable life policies is that: policyholders have flexibility in making their own investments. Individuals avoid the high fees of variable life insurance by: purchasing lower-cost term insurance and investing the cost difference.
What is the benefit of a variable life policy as compared to a universal life policy quizlet?
Terms in this set (5)
-Variable life insurance offers fixed premiums, a flexible death benefit and the ability to earn a variable rate of return. The difference in these structures can help a potential policyholder to choose the right type of policy.
What is a variable life insurance policy?
A variable life insurance policy is a contract between you and an insurance company. It is intended to meet certain insurance needs, investment goals, and tax planning objectives. It is a policy that pays a specified amount to your family or others (your beneficiaries) upon your death.
What are the pros and cons of universal life insurance?
Overview of Universal Life
| Pros | Cons |
|---|---|
| Designed to offer more flexibility than whole life | Doesn’t have the guaranteed level premium that’s available with whole life |
| Cash value grows at a variable interest rate, which could yield higher returns | Variable rates also mean that the interest on the cash value could be low |
What is universal life insurance how does it differ from term life and whole life universal life insurance quizlet?
Additionally, due to its lifetime coverage, universal life typically has higher premium payments than term. Whole life insurance is a type of permanent life insurance designed to provide lifetime coverage. Because of the lifetime coverage period, whole life usually has higher premium payments than term life.
What happens when a universal life insurance policy matures?
When a policy reaches its maturity date, you generally receive payment and coverage ends. Depending on the policy, the payment might be the death benefit or a specified dollar amount, but it’s usually equal to the policy’s cash value.
Which of the following best describes the policy benefits Variable Life policies?
Which of the following BEST describes the policy benefits of Variable Life policies? The policy benefits are directly linked to the investment performance of the underlying assets. … Policy owners may buy additional units of the Variable Life fund and these units will be allocated to new Variable Life insurance policies.
What is variable life insurance quizlet?
What is Variable Life? –Permanent life insurance with investment flexibility. -Level premium. -Policyholder’s separate investment account for cash value (CV)
What is the greatest risk in a variable life insurance policy?
The greatest risk in a variable life insurance policy is the risk of the investments. The insurance company doesn’t guarantee any rate of return and doesn’t offer protection for investment losses. Like any investment, the cash value component of a variable life insurance policy comes with risk.
Which of the following are the main characteristics of variable life insurance policies?
Variable universal life is a type of permanent life insurance policy. Its features include cash value, investment variety, flexible premiums and a flexible death benefit.
Does variable life insurance have a guaranteed cash value?
Investments. … Since you’re able to choose from a variety of investment options, variable life insurance policies have higher upside potential than other cash value policies, such as whole life insurance. However, variable life insurance policies may not have a guaranteed rate of return, or it may be quite low.
Does variable life insurance expire?
Variable life insurance is a permanent life insurance policy, meaning it lasts until the policyholder’s death, combined with a cash-value account invested in bonds or stocks.
Is variable life insurance tax free?
Most variable universal life insurance policies offer flexible premium payments. Your premium payments contribute to your death benefit, build cash value and pay operational costs. Like with other types of life insurance policies, your premiums aren’t tax deductible.
Who benefits in IOLI when the insured dies?
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? The policyowner (investor) benefits upon the death of the insured.
What benefit does the payor clause on a juvenile life policy provide?
The Payor clause of an insurance policy on a juvenile provides which of the following benefits? Answer: “A waiver of premiums if the payor becomes disabled“. The Payor clause of a juvenile life policy provides a waiver of premiums if the payor becomes disabled.
What is Stoli and IOLI?
Stranger-owned life insurance (STOLI) is a life insurance policy that benefits a stranger, someone the insured person may not know. STOLI transactions are illegal in some states. Investor-owned life insurance (IOLI) is where an investor pays a person to take out a large life insurance policy for the person.