Variable Life Insurance

Current Rates, News & Information

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 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.

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