Variable Life Insurance Current Rates, News & Information

Variable Life Insurance: High Payouts?

Posted in Life Insurance , Variable Life Insurance

September 25th, 2009
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If a variable life insurance policyholder opts for a high value policy and consistently funds the policy, there can be very high payouts. Until 2004, most variable life insurance policies could be purchased with the payout totaling close to $2,000,000. At that time policy premiums fell and new policy types allowed for better payouts, which prompted insurance providers such as MetLife and Prudential Financial to raise the maximum payout.

Raising Premium Payments

To reap the rewards of a high payout, the policyholder needs to pay substantial premiums to build the cash value in his policy. In general, the cost of all permanent life insurance policies are significantly higher than term life insurance. That is because a portion of the premium payment goes not only to paying for the insurance death benefit, but a portion of that is also invested into gaining cash value that can be tapped into at a future time.

Before you sign on the line for a variable life insurance policy with a high payout, you need to honestly asses your current and future earning potential and the overall needs of your family. Sometimes the life insurance policy is not worth the financial effort, especially if the cost negatively impacts your current quality of life.

Variable Life Insurance: Maximum Payout Amount?

Posted in Life Insurance , Variable Life Insurance

September 24th, 2009
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Your career has been quite lucrative and because of this, your family has become accustomed to a certain quality of life. If you want to ensure that the level is maintained even after your passing, insure! The maximum payout amounts for variable life insurance is quite large, and any beneficiary worth their weight in gold can manage to live the rest of their lives on the death benefit you leave behind.

In the days before the new century was ushered in, the standard rule insurance underwriters used to calculate the payout amount on a variable life policy was 10 times the annual salary of the policyholder. According to MetLife, even in those times the average policy really only equaled about 2.5 times their annual income. However, that was then and this is now.

Raised Payouts

As somewhat of a marketing strategy, in 2004 insurance giants MetLife and Prudential Financial (now Wachovia) raised the limit on how much they were willing to provide in a maximum payout amount for variable life insurance policyholders. At that time, they both raised the bar to 30 years income, meaning that a 30-year-old earning $100,000 annually could choose a variable life insurance policy with a $3,000,000 death benefit payout. Since then, based on your financial situation, it could possibly be more.

Weighing Benefits

It is important to realize that for your beneficiaries to reap the rewards of your hard work, it will cost you substantial amounts of money in the form of policy premiums. Permanent life insurance policies of any kind are commonly more expensive than term life insurance. The price difference between the two policies can be huge.

While it is great to know that a sizable maximum payout for a variable life insurance policy is out there, it may not be necessary for your needs. Make sure to decide on what kind of a target benefit payout you want in order to determine what your monthly premium payments should be.

How am I Billed for Variable Life Insurance?

Posted in Life Insurance , Variable Life Insurance

September 22nd, 2009
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Variable life insurance is a costly but beneficial way to invest for your future needs and provide a death benefit to your family when you are no longer there for them. Variable life insurance is the most expensive insurance because a portion of each premium payment not only goes to the benefits payment, but also contributes to the cash value investment that policyholders can benefit from.

Variable Life Basics

Variable life insurance is often compared to a mortgage payment in the sense that both have costly payments, and customers need a long time to “pay-up” to fully own the property or policy. If you opt into a variable life policy, you will be paying monthly and be expected to pay your premium on time. Variable life insurance offers permanent life insurance protection unless a person does not pay their premiums on time.

Payments and Billing

The bill amount will vary based on the length of the variable life insurance policy and the overall amount of coverage/investment you opt into. But because the overall cost for maintaining a variable life policy is so steep, monthly bills and payments are the easiest way for policyholders to fit this expense in their overall budget. Another interesting feature is that the out of pocket premium costs can be offset by any gains made in the market on the cash value. Those profits can be applied directly to the insurance bill due at that time.

If you are interested in utilizing a variable life insurance policy to give a gift to your heirs as well as plan for your own financial future, it would be extremely beneficial to speak to a professional to help plan your strategy.

Variable Life Insurance: Longest Term Limit

Posted in Life Insurance , Variable Life Insurance

September 22nd, 2009
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With a variable life insurance policy, members can either experience great gains or rewards or actually suffer significant losses. With a variable policy, the policyholder opts into a type of insurance that pays death benefits and provides an investment strategy. The policyholder will experience gains and losses depending on market conditions due to the investment component.

Policy Limits

If you are opting into a variable life insurance policy, you should probably consider committing for the long run as you will be able to build cash value by your funding monthly premiums as well as endure the ups and downs of the market. The longest variable life limit is up to the discretion of the holder, and can range from anywhere from 30 years to 55 years of investing.

Who Qualifies?

Because a portion of almost every premium payment is invested, variable life insurance policies are some of the most costly types of insurance plans out there. Anyone aged 0-99 can opt into a variable life life insurance policy, however the later of life you choose this coverage, the more money it will cost you. That is because the premiums will remain level throughout the terms of the policy and if you choose to sign up for a variable life insurance policy at an earlier age, you will have more time to make the payments and each payment will be smaller in the process.

If you are considering to choose the longest variable life insurance policy limit, you need to thoroughly investigate all your finances to ensure that this is the best decision for you. The policy comes with both financial risks and a high price tag, and those factors need to be considered in your calculations and planning.

Advantages / Disadvantages of Variable Life Insurance

Posted in Life Insurance , Variable Life Insurance

September 15th, 2009
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If you are investigating options toprovides more layers of financial protection for your family, friends or even favorite charity upon your death, a variable life insurance policy may be for you. The reason why it is called “variable” is when you pay your premiums towards your policy, a portion is directly allocated to an investment portfolio managed by the insurance company and is subject to market fluctuations. Those market fluctuations make the cash-value of the policy variable, while the death benefit is guaranteed.

If you are interested in investing in a variable life insurance policy, it is important to weigh the pros and cons before committing. Speaking to a specialist in the life insurance industry will prove to be extremely beneficial in helping you figure out your strategy as policies can be complex.

FAQ: Why Choose Variable Life Insurance?

Posted in Life Insurance , Variable Life Insurance

September 11th, 2009
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A variable life insurance policy is not only beneficial to the heirs who are chosen to receive the death benefit from the policyholder, but the policyholder can also reap the financial rewards of funding a policy that builds cash value over time.

By choosing a variable life insurance policy you will get the option to target your premium investment money towards opportunities of your choice. As a policyholder you can have your cash value invested into fixed income investments, stocks, bonds, or even money market funds.

It is hard to consider choosing a life insurance policy when the last thing anyone wants to do is think about their own mortality. However, by taking the time to consider your insurance options now when you are young and healthy, you can make wise decisions that will affect both your future and the future of those you love.

FAQ: Who Benefits from Variable Life Insurance?

Posted in Life Insurance , Variable Life Insurance

September 9th, 2009
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With variable life insurance, both the heirs and policyholder can benefit. Variable life insurance is a dual purpose policy. One portion guarantees a death benefit to be paid to the beneficiaries while there is an investment portion that can also be used by the policyholder to offset their taxes while building cash value in the form of a nest egg.

How Cash Value Works

The policyholder of a variable life insurance policy can get the flexibility of having a diversified investment portfolio through the large assortment of investment options in the plan. If a rate of return is achieved, no taxes need to be paid (until the policy is surrendered) and the interest earned can be applied directly towards the premium amount due. This lowers your out of pocket expenses required for maintaining a costly variable life insurance policy.

It is up to the policy holder to determine who can benefit from the variable life insurance policy upon their death. Some common choices of choosing beneficiaries include:

• Spouses
• Children
• Other family members
• Friends
• Care providers
• Charities
• Alma Maters

Other Benefits

It is important to realize that the cost of participating in a variable life insurance policy is significantly steeper than other plans out there. However, by paying more the policyholder can benefit from their policy in a number of ways. As a policyholder, you will have a greater degree of control and flexibility over the funds. Additionally, large profits are not unusual for a variable life insurance investment strategy courtesy of tax-deferred interest. Finally, your beneficiaries can enjoy large tax free lump sums of money.

Can I Withdraw Cash from a Variable Life Insurance Policy?

Posted in Life Insurance , Variable Life Insurance

August 26th, 2009
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In the 1970′s, insurance companies introduced variable life insurance policies to compete for consumer investment dollars against other financial institutions. Variable life insurance policies provide policyholders with a way to save money while providing death benefits to heirs upon their demise. During the policyholder’s lifetime, monthly premiums are paid towards the policy. A portion of the payment goes to offset the overall cost of the insurance while the remaining balance is actually put towards investments that may or may-not increase in cash value, depending on the overall market.

Can You Withdraw from Your Life Policy?

With a variable life insurance policy you cannot withdrawal cash but a loan can be taken against the total value of the investment depending on the cash value. When you opt to take a loan and not withdraw cash from a variable life insurance policy it may negatively impact the amount of money your heirs ultimately inherit. During your lifetime, loans from a variable life insurance policy can provide you with some tax free access to money to be used as you see fit. It is important to confirm that information with your variable life insurance policy provider first however.

By borrowing against a variable life insurance policy, not only will the death benefit be a lower amount, the cash value of the investment will be negatively adjusted as well. If the policy lapses due to non-payment and there is an outstanding loan on the amount, the balance of the loan will be tallied up with the existing cash surrender value and a portion of it will become taxable.

Compare Life Insurance: Universal vs. Variable

Posted in Compare Life Insurance , Life Insurance , Life Insurance Quotes , Permanent Insurance , Universal Life Insurance , Variable Life Insurance

April 29th, 2009
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Is choosing between universal life insurance and variable life insurance on your mind? Before you stress out over which type you should purchase, it’s good to take a closer look at their features.

What is Universal Life Insurance?

Universal life insurance is a form of permanent life insurance, which means that it not only offers the death benefit, which is payable to your beneficiary upon your death, but it also comes with an investment component that allows you to grow funds in a separate account at a fixed rate of growth.

What’s unique about this type of coverage is that as your savings/investment amount grows, it becomes a cash value that you can take out. Even better, you can make an arrangement to have your savings applied to your premium so that you no longer have to make out-of-pocket payments anymore. However, because it comes with this added investment feature, it is often more expensive that other policy types.

What is Variable Life Insurance?

Variable life insurance is very similar to universal in that it is a form of permanent life insurance, offers the death benefit at the predetermined premium, and offers an investment component. However, whereas universal’s investment component only allows you to invest in one account, variable allows you to take part in various investment funds. By taking this route, you can choose among both risky and safe options, allowing you to make decisions that can grow your account at a faster rate.

There are benefits to purchasing both variable life insurance and universal life insurance. The key to choosing which is best for you rests primarily in your investment preferences. So if you know how you’d like to invest while paying your premiums, then deciding between the two should be that much easier.

If you’re having trouble finding life insurance quotes online, fill out our life insurance form and within minutes you’ll receive rate quotes from leading insurers. The process is absolutely free and secure.

Compare Life Insurance: Whole vs. Variable

Posted in Compare Life Insurance , Life Insurance , Life Insurance Quotes , Permanent Insurance , Universal Life Insurance , Variable Life Insurance , Whole Life Insurance

April 27th, 2009
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When comparing life insurance policies, you may find yourself having to choose between whole life and variable life. If this is the case, it’s good to know as much about the two types as possible so that when the time comes to choose, you’ll be well-informed.

Permanent Life Insurance

In case you were unaware, both whole life and variable life, like universal life, are forms of permanent insurance. With this type of policy, in addition to receiving a benefit that will be paid to your beneficiary upon your death, your policy also comes with a savings component that allows you to make investments. So instead of simply paying your premium every month to accumulate enough to pay out to your loved ones, you are also investing in a money market security, mutual fund, bond, or other form of investment.

Both are permanent life insurance policies, making them similar. Now, let’s take a look at what makes them different.

Whole Life Insurance

When taking out a whole life policy, it comes with some unique features. Let’s take a look at what they are:

• Fixed premium. With this type of policy, you pay a fixed premium that is guaranteed for the life of the contract. For some, this doesn’t work, because you can’t increase or decrease it at any point. You instead have to purchase a new policy.
• Minimum death benefit. You are guaranteed a minimum face amount, no matter how long you live as long as the premiums are paid.
• Investments. Your premiums are invested in the company’s general account. Some don’t care, however, for the lack of flexibility in investment opportunities.
• Cash value guaranteed. The minimum cash value for your premium investments is guaranteed.

Variable Life Insurance

When comparing insurance policies, it’s good to see the differences in variable life:

• Investment flexibility. Unlike with the whole life policy, your investments are flexible, allowing you to invest in multiple portfolios.
• Cash value. When purchasing this policy, it’s good to know that your cash value is not guaranteed.

Other elements of these two policies are very similar. So if you know that investments are important to you, then it’ll be up to you to decide whether the whole life or variable life is right for you.

Having trouble finding the right life insurance quotes? Fill out our life insurance form and you’ll receive rate quotes from leading insurers within minutes. Best of all, it’s secure, free and easy!