Universal variable life
Cash Value Policies: Universal Variable Life
Description Premiums Cash Value Advantages Disadvantages Uses
Combines features of Universal Life and Variable Life Like Universal Life, buyer controls amount of premium; Like Variable Life, buyer directs premium payments into several sub-accounts Amount depends on premium funding and on investment performance of sub-accounts chosen Flexibility in premium amount, face amount, and amount going into cash value; Potential for investment return beyond that possible with "general account" policies No forced savings; If investment component of policy is not funded, policy is a very expensive way of buying term protection; Poor investment performance can drain or eliminate cash values and death benefits Young, risk-tolerant buyers having long-term insurance and investment needs; Alternative to buying term and investing savings in a side fund