Variable universal life insurance is a form of universal life insurance. It is permanent insurance that provides a flexible premium and an adjustable benefit—meaning the policyholder decides how much to put in above a set minimum, potentially increasing the face value of the policy.
But there’s an important difference.
With a variable universal life insurance policy, the policyholder directs how premiums are invested by allocating them to one or more investment subaccounts. Depending on the policy, these subaccounts could include a fixed-interest option, as well as various stock, bond, or money-market choices. This provides access to the potentially higher returns provided by the financial markets. It also means returns could underperform those provided by other life insurance products.
Variable universal life insurance combines the protection and tax efficiencies of life insurance with the investment potential of a comprehensive selection of variable investment options. The insurance component provides the death benefit coverage and the variable component gives you the flexibility to potentially increase the policy’s cash value. Variable insurance products are subject to investment risk, are not guaranteed and will fluctuate in value. In addition, there is no guarantee that any variable investment option will meet its stated objective.
Variable life insurance is sold by prospectus only. Investors should consider the investment objectives, risks, charges, and expenses of the variable insurance contract and sub-accounts carefully before investing. The prospectus contains this and other information about the variable insurance contract and sub-accounts. You can obtain contract and underlying sub-account prospectuses from your financial representative. Please read the prospectus carefully before you invest or send money and assess your need for death-benefit coverage.
Also, please remember that money held in money market funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Money market funds seek to preserve the value of your investment at $1.00 a share. However, it is possible to lose money by investing in a money market fund.