Variable universal policies for life insurance are similar to more conventional universal plans, except they are designed to be even more flexible in their application. This type of plan provides all the expected benefits from a conventional universal policy but also offers benefits for those customers who have an eye towards the investment side of insurance and want potential for better cash value.
There are a variety of ways this can be achieved, but a lot of it is through cash accumulation that is tax-deferred in how it grows and a strong market can lead to an increase in value, although it is important to note that the opposite is true, as well. The value on one of these policies can also decrease based on what the markets are doing.
While the all-important coverage is here in this plan, there’s also the concern that the amount the coverage is worth will vary depending on market fluctuations, making it harder to plan.
