Variable Universal Life Insurance - VUL

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What is 'Variable Universal Life Insurance - VUL'

Variable universal life insurance (VUL) is a form of cash-value life insurance that offers both a death benefit and an investment feature. The premium amount for variable universal life insurance (VUL) is flexible and may be changed by the consumer as needed, though these changes can result in a change in the coverage amount. The investment feature usually includes "sub-accounts," which function very similar to mutual funds and can provide exposure to stocks and bonds. This exposure offers the possibility of an increased rate of return over a normal universal life or permanent insurance policy.

BREAKING DOWN 'Variable Universal Life Insurance - VUL'

While variable universal life insurance offers increased flexibility and growth potential over a traditional cash-value whole life insurance policy, investors should be sure to compare this type of policy against a "buy term and invest the rest" strategy. Particular attention should be paid to the management fees of the variable investment options, as well as to whether or not an individual even needs life insurance coverage beyond a specific point in the future.

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RELATED FAQS
  1. What is indexed universal life insurance?

  2. Can I convert my universal life policy to a whole life policy?

    It seems like my universal policy keeps going up each year in premiums. ... Read Answer >>
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    Term life insurance is the most basic of insurance policies. It is nothing more than an insurance policy that provides protection ... Read Answer >>
  4. What is variable life insurance?

    Variable life insurance is a permanent life insurance policy with an investment component. The policy has a cash value account, ... Read Answer >>
  5. What is the difference between the death benefit and cash value of an insurance policy?

    Understand the difference between the various components of a life insurance policy including the death benefit and a policy's ... Read Answer >>
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