What is a variable universal policy?

Updated: January 2020. Variable universal life is a type of permanent life insurance policy. Its features include cash value, investment variety, flexible premiums and a flexible death benefit.

What is a variable life insurance policy?

A variable life insurance policy is a contract between you and an insurance company. It is intended to meet certain insurance needs, investment goals, and tax planning objectives. It is a policy that pays a specified amount to your family or others (your beneficiaries) upon your death.

Is Universal Life variable life?

Variable life insurance is a type of permanent life insurance with a cash value and with investment options that work like a mutual fund. Universal life insurance is a type of permanent life insurance with a cash value that grows based on the current interest rate set by the insurer.

Is variable universal life permanent?

Variable universal life (VUL) insurance is a form of permanent life insurance. It combines the main benefit of life insurance—a financial payout to your loved ones when you die—with investment subaccounts. These investment subaccounts can be used to invest the cash value of your policy.

What is a group variable universal life insurance?

A group universal life policy is a form of universal life insurance offered to a group of people at a lower cost than what is typically offered to an individual. Group universal life insurance is commonly purchased by corporations that want to provide their employees with life insurance coverage.

What type of premium do both universal life and variable universal life policies have?

Like standard universal life insurance, the premium is flexible. VUL insurance policies typically have both a maximum cap and minimum floor on the investment return associated with the savings component. VUL insurance has investment subaccounts that allow for the investment of the cash value.

What is variable life insurance quizlet?

What is Variable Life? –Permanent life insurance with investment flexibility. -Level premium. -Policyholder’s separate investment account for cash value (CV)

How is variable whole life different from variable universal life?

A variable life insurance policy allows most of the premiums to be invested in an investment account, combining the benefits of a variable policy with a whole life policy. … Variable universal life insurance policies have two death benefit options: fixed and variable.

Which of the following are the features of a variable life insurance policy quizlet?

Variable life policies have fixed, level premiums. Variable life policies guarantee a minimum death benefit, which is why premiums are fixed and level.

How is a variable universal life insurance policy different from a universal life insurance policy quizlet?

Universal life gives the policyholder the flexibility to skip some premium payments. Variable life invests premiums in a separate account and typically invests in equities, whereas both whole life and universal life invest premiums in the general account, which must be heavily invested in fixed income securities.

What is the benefit of a variable life policy as compared to a universal life policy quizlet?

-Variable life insurance offers fixed premiums, a flexible death benefit and the ability to earn a variable rate of return. The difference in these structures can help a potential policyholder to choose the right type of policy.

What is a variable death benefit?

A variable death benefit is the amount in an investment account paid to a decedent’s beneficiary from a variable life insurance policy. The investment account or cash value account within a variable life insurance policy is used to invest in stocks or equity mutual funds for returns.

Which of the following is true concerning the conversion of group life insurance coverage to an individual policy?

All of the following are true regarding the conversion option for group life insurance, EXCEPT: The converted coverage must be whole life. The correct answer is: The converted coverage may be term or whole life. … Premium rates for group life insurance are based on the group has a whole, not each individual.

What type of premium is variable whole life insurance based on?

A variable life insurance policy is based on level-fixed premium. as the cash value component increases, premiums decrease.

Why is variable universal life insurance regulated by both federal and state?

Why? Because of investment risks, variable policies are considered securities contracts. They are regulated under the federal securities laws. Following the federal regulations, sales professionals must provide a prospectus of available investment products to potential buyers.

Which of the following entities regulate variable life policies?

Variable life insurance is regulated by both the state and federal government, as well as the Insurance Department, and the SEC. …

Which of the following best defines target premium in a universal life policy?

When would a 20-pay whole life policy endow? … Which of the following best defines target premium in a universal life policy? The recommended amount that keep the policy in force throughout its lifetime. In which of the following cases will the insured be able to receive the full face amount from the whole life policy?

What type of life insurance is most commonly used for group plans?

Term insurance
Term insurance is the most common form of group life insurance. Group term life is typically provided in the form of yearly renewable term insurance. When group term insurance is provided through your employer, the employer usually pays for most (and in some cases all) of the premiums.