Variable Life Insurance California CA
Reader’s Question:
My friend is a life insurance agent here in California and recently told me about Variable Life Insurance, is this a good policy?
Mark
Anaheim, CA
Variable Life Insurance is a kind of long-term or permanent life insurance policy that uses many types of investment mediums to grow your money. This is similar to a Universal Life Insurance Policy in which the premium you pay is accumulated into a cash value that earns growth through interest rates (mostly through money market investments), whereas Variable life insurance policies allows you the freedom to choose where you would want your money invested. You can choose to have your policies cash value go into fixed income investments, through money market funds, stocks or bonds. You can even choose to diversify your cash value into several types of investments as well as change your investments multiple times in a year.
The downside of this is of course, if you chosen investment channels perform poorly, then so will your policies actual cash value there in California, which determines the amount of death benefit you get from the insurance policy (the death benefit however, could not fall below the original insurance amount you purchased). One of the reasons why people chose to invest in this type of life insurance policy is that it allows you to have a tax-shelter on your money since the death benefit is only taxed once it is awarded. Admittedly, Variable Life Insurance might not be for everyone but if you are investment savvy and want to combine the benefits of an investment portfolio and life insurance plan then a Variable Life Insurance Plan might be what you are looking for.
Tags: variable life insurance, life insurance, advise, life insurance policy
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