Variable Universal Life (VUL) Insurance Policy
VUL or Variable Universal Life contracts are permanent life insurance policies that offer death benefits until 100 or life and allow for cash value build up in investment accounts. Universal policies are popular based on their flexible premiums, tax free cash benefits and the ability to borrow off of the variable insurance policy itself.
This is a form of permanent life insurance as it is not temporary insurance like a term policy. A Universal variable life UVL or VUL policy can act as pure insurance and retirement benefit because of the cash value account. The benefit will fluctuate with the values within the account. The insured bears more risk with a VUL as there are investments made into funds within the policy contract account. These investment values will vary with market conditions. Over the long term, these values will normally outperform fixed income or straight insurance policies.
Many Variable contracts offer flexible premiums. These flex payments allow for skipping premiums or paying in lump sum. As long as the cash value and investment value outperform expenses, flexible premiums will keep the policy in effect.
VUL combines the aspects of tax retirement planning and protection of life insurance and the cash value in the account can potentially grow above and beyond the initial death benefit set on the policy or plan.
Tax Free Growth
As long as the variable insurance plan remains active, the value and growth in the account accumulates tax free. Withdrawels (not loans) are subject to regular income tax distribution.
VUL policies are also used in estate planning for transferring of estate assets to their family.
Charges, Expenses, Fees
Having the flexible premium on variable life plans allows for periodic premium payment or lump some. There must always be enough money in the account to cover any fees and insurance expenses ongoing. Should the cash value and the investments within the VUL perform well enough - many times those charges are covered.
VUL Income addresses three of your clients most basic needs:
First, it protects your clients' loved ones through its life insurance death benefit. Owning life insurance helps ensure clients their beneficiaries can maintain their current standard of living in the event of premature death. When used in a business context, the policy's death benefit can help ensure continuation of a business.
Second, this product can help protect your clients' future by building cash value. Tax-free liquidity through policy loans and partial surrenders is an attractive feature for both families and businesses.
Third, it gives your clients control over policy funding cash value investments. With VUL Income your clients control their policy in important ways:
Increasing or decreasing the death benefit as needs change.
Changing the premium amount and payment schedule.
Determining which investment options are right for their needs.
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