Variable life insurance is a form of permanent (whole life) insurance. Variable life insurance provides permanent protection to beneficiaries upon the death of the policy holder. It allows the policy holder to allocate a portion of the premium to a separate account within the policy holder’s life insurance company’s portfolio (money market funds, stocks, bonds, and so on). Keep in mind that this type of life insurance product carries certain risks. Variable life insurance policies are considered securities contracts, and they are regulated by the U.S. Securities and Exchange Commission.
Benefits of this type of policy include being able to apply the interest earned on these investments to the policy’s premium. There are some potential drawbacks that you should consider. If the stock or bond markets experience a downturn or correction, this could negatively affect the underlying investments. This event would also affect the death benefit (though it won’t decline past a certain pre-defined level). Contact a Century Benefits agent to learn if a variable life insurance policy is right for you and your family.