Variable Life Insurance
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Safeguarding your family’s future is one of the wisest decisions you can make – something life insurance can help with.
However, life insurance policies do come at a cost. You need a considerable amount regularly to stay protected, and many people balk at the idea of paying so much for so long.
One of the most popular types of life insurance is variable life insurance. Variable life insurance gives you and your loved ones additional financial protection for an extended period of time without having to pay as much as you would with other life insurance policies.
What is Variable Life Insurance?
Variable life insurance is a type of life insurance policy that combines the typical death benefit with an investment component.
Essentially, it’s a way to protect your dependents financially in the event of your death while also having the potential to grow your money over time.
When you get a variable life insurance policy, you’ll pay regular premiums to the insurer, just like with other types of life insurance.
However, instead of simply paying for coverage, some of that money will be invested in various investment options chosen by the policyholder.
The investment component of variable life insurance is what sets it apart from other types of life insurance policies. Keep in mind that this means there is some risk involved, as the money could potentially lose value.
Additionally, policyholders typically don’t have much control over their investments, as the insurer calls all the shots.
One important thing to remember with variable life insurance is that because it includes an investment component, there is some risk involved. If the investments don’t perform well, the cash value and death benefit may decrease over time. Not to mention, there are management fees and other costs associated with variable life insurance policies.
What Are the Advantages of Variable Life Insurance?
Variable life insurance is one of the more complex life insurance products, so why exactly should you consider it over other types?
- Fixed premiums. With variable life insurance, you pay a fixed premium for the duration of the policy, which can last a lifetime.
- Investment flexibility. Policyholders can choose from a wide range of investment options, such as mutual funds, stocks, and bonds, which can result in a higher return on the cash value of the insurance.
- Tax-deferred growth. The cash value of the policy grows on a tax-deferred basis, meaning that policyholders do not have to pay taxes on the growth until they withdraw the money. This can be a great avenue for long-term investments.
- Customizable benefits. Variable life insurance policies are customizable, meaning that policyholders can adjust their coverage as their needs change. Benefits can also increase depending on the performance of the investment component.
That said, variable life insurance isn’t suitable for everyone – after all, we all have different needs, risk tolerances, and situations.
If you feel like you need a more careful assessment of whether or not you need this insurance policy, talk to your financial advisor or an insurance professional.
When Should You Get Variable Life Insurance?
Variable life insurance is a great option for those who want to combine life insurance protection with potential long-term investments.
Here are other reasons why you should consider getting variable life insurance:
- You want permanent life insurance. Variable life insurance will cover you for your entire lifetime, so you have nothing to worry about.
- You want higher life insurance coverage. Variable life insurance can be customized to have a higher death benefit. In addition, your investments will also be added to the payout in case something happens to you, so you can potentially get more if they’re doing well.
- You have a long-term savings goal. Although it’s not the main point of insurance, having an investment component means that a variable life insurance policy can help you achieve your long-term savings goals.
- You have a medium-high risk tolerance. Variable life insurance is riskier than whole life insurance but less risky than variable universal life insurance (VUL).
Variable life insurance is a significant commitment of your time and money, so you should optimize your investment to make the most out of your resources.
Get the Best Variable Life Insurance With Magnum Insurance
Getting variable life insurance is certainly a good option if you want something that will cover you for life while providing you with the opportunity to grow your investments.
At Magnum Insurance, we offer tailor-made life insurance policies that suit your needs and capacity. We also provide specialized advice to help you make the right decisions for your variable life insurance policy. If you want to learn more about this type of life insurance, contact Magnum Insurance for a free quote today!
Magnum Insurance makes Life Insurance easy
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Manage your policy. File and track a claim. Do it all with a few taps on your smartphone.
No one likes to file or manage a claim. That’s why we make the process easy with online forms and dedicated agents.
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