variable life insurance

Variable life insurance is a type of permanent life insurance that combines a death benefit with a cash value component that can be invested. Similar to whole life insurance, it offers a minimum death benefit and fixed premiums. However, its unique feature is that the policy's cash value is allocated to investment accounts, similar to mutual funds.1

If these investments perform well, the cash value can grow significantly. Conversely, poor investment performance can lead to a loss in value. The gains from these accounts can be used to pay annual premiums or added to the policy's value. This type of policy offers potential for higher returns but also carries investment risk.12