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What Is Flexible Premium Variable in Life Insurance?
<lingo>Flexible premium variable life insurance is a type of coverage and is more commonly known as variable life insurance. It is also sometimes called variable appreciable life insurance. Not all universal life insurance policies have flexible premiums. However, these policies have a cash value structure but also allows the policyholder to use the cash value of that policy to pay for the costs or premiums of the insurance over time. This is a hybrid version of life insurance that is a bit different than the standard variable life policy.</lingo>
Flexible Premium Variable Life Insurance Clearly and Briefly Explained
Variable life insurance is a type of life insurance that has the typical death benefit payment should the individual covered die while the policy is in place. It also has a cash value account, which builds value over time and with each payment. The flexible premium with variable life insurance has this same structure. The only key difference is that the policyholder has the ability to pay the premiums for the life insurance plan using the funds from the cash value account.
<twitter>Flexible premium variable life insurance is a type of coverage and is more commonly known as variable life insurance. It is also sometimes called variable appreciable life insurance.</twitter>
In some cases, policyholders may also elect to pay larger amounts of premiums for this policy, though they do not have to do so. In doing so, they may be able to build the cash value of the policy faster.
Most of these policies have a minimum and a maximum premium from which the policyholder can choose to pay. This flexible payment schedule can offer some key advantages. For example, a policyholder may elect not to pay any premiums if they want to use the cash value to pay the cost. If they overfund the cash value early, this allows the investment to build up value, allowing them to withdraw those funds at a later time, after the value has built up. This can allow the policyholder to use the funds as a type of income to support their treatment. Individuals considering this type of life insurance policy should determine which one is the best option for their unique needs based on their retirement planning goals.
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