What Is A VUL Life Insurance Policy?

  1. 4249 POINTS
    Gary Lane
    President, Lane Independent Agency, Southern California
    A Variable Universal Life Insurance Policy, is a type of permanent life insurance, as opposed to Term Life Insurance. Term has rates which escalate after a stated number of years, but universal generally does not, for as long as you live. As Variable, its amount varies based on whatever market interest you have tied it to. The purpose is to grow its value higher than a standard universal policy would do. However, you run the risk that the market may go down, decreasing the value of the policy, up to a certain point depending on the policy terms. You can borrow against but be careful never to take too much or risk the policy lapsing leaving you no coverage and protection. It is for those who want to take a gamble with your life insurance and generally for younger folks who can make up for losses later. Thank you. GARY LANE.
    Answered on July 3, 2014
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  2. 11783 POINTS
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    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    What is a variable universal life policy? A VUL is a type of universal life policy that has it's investment pool in the stock market. Universal life normally consists of an insurance account and an investment account that make up the guts of the policy. Any funds collected above the cost of insurance are deposited in the investment account. Later on, those funds are used to help reduce the actual cost of insurance as Universal life is basically term insurance with an investment account. Variable UL is simply the same thing except the investment account is now based in market securities (usually mutual funds) which present the opportunity of higher returns. Be aware with the higher returns there also comes greater risk. A VUL should never be purchased and forgotten about. Chances are it won't be there if that's what the purchaser does. A VUL requires oversight and adjustments over time to get the best use out of it.
    Answered on October 7, 2015
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