Variable Life Insurance Pennsylvania PA
Reader’s Question:
My co-employees here in Pennsylvania keep talking about this variable life insurance. What is it?
Hector
Pittsburg, PA
Hector, variable life insurance is a type of life insurance that gives you more power and control on what you would like to do with your policy, particularly with regards to death benefits and cash value accumulated.
One feature of variable life insurance is that the premium has a tendency to go up or down, depending on the state of the market. The premium of your variable insurance policy usually has two parts. One part goes to the payment of your life insurance, and another part, 4% of which is set aside to build up your cash value that will be used on your investment portfolio. It is called variable life insurance because you can decide where to place your investment (stocks, bonds or other investment instruments allowed by your insurer). You can have a free hand on how much of the money you can reinvest and how much you want to go towards your policy. The catch here is that when markets are experiencing downturns, so will your cash value and death benefits. The opposite is true, too–the good point of this insurance type is that when markets are turning bullish, your earnings and benefits increases, too.
But first things first, take note that your life insurance agent in Pennsylvania should have NASD before he can sell you a variable life plan.
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