Variable Universal Life Insurance

Variable Universal Life Insurance

A VUL is a type of permanent life insurance with cash value that offers both death benefit and an investment feature. Policyholders invest the cash value of the policy in stock and/or bond markets.

A VUL is an investment-oriented policy that provides a return linked to an underlying portfolio of securities. The portfolio typically is a group of mutual funds established by the insurer as a separate account, with the policyholder given some investment discretion in choosing the mix of assets such as a common stock fund, a bond fund, and a money market fund. The better the returns on the investment portfolio, the higher the death benefit of the variable life policy. The premium amount for a VUL is flexible and may be changed by the consumer as needed, though these changes can result in a change in the coverage amount.

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