Variable Universal Life Insurance - What is Variable Life Insurance and how does it work?

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Variable Universal Life Insurance (often shortened to VUL) is a type of permanent life insurance, that builds a cash value. In a VUL, the cash value can be invested in a wide variety of separate accounts, similar to mutual funds, and the choice of which of the available separate accounts to use is entirely up to the contract owner. The death benefit and the cash value of the variable life insurance policy fluctuate according to the investment performance of separate accounts.

Most variable life insurance policies guarantee that the death benefit will not fall below a specified minimum. A minimum cash value is seldom guaranteed. Because the policy owner assumes investment risk under variable life insurance policies, these products are considered securities contracts. In the United States, variable life insurance policies must be registered with the Securities and Exchange Commission (SEC), and only agents who have passed the National Association of Securities Dealers (NASD) examination may sell this product.

1stQuote.com does not sell Variable Life Insurance online and this summary is only intended as a brief thumbnail sketch of this product. Variable life insurance products are more complicated than basic term life insurance and you may wish to consult a local life insurance agent if you are interested in variable life insurance products.