A variable life insurance policy is written with a specific death benefit amount, which is the least guaranteed amount that will be paid as death proceeds. Money that you take from the policy's cash value means your loved ones will receive a smaller death benefit when you die. Both of these two terms count the premium that the carrier will pay out while valid claims. However, variable life insurance policies may not have a guaranteed rate of return, or it may be quite low. The reason for the flexibility is that the payout associated with a variable life policy is governed by the performance of the underlying investments that fund the coverage. variable life insurance policy, after deduction of charges for taxes, investment expenses and mortality and expense guarantees to maintain the variable death benefit equal at all times to the amount of death benefit, other than incidental insurance benefits, which would be payable under the plan of insurance if the death By contrast, adjustable life insurance does not include a floating death benefit; instead, the amount of the death benefit is fixed according to the terms and conditions of the policy. 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You should confirm whether the death benefit is guaranteed and, if so, if the guaranteed value is the same as what is projected. {"buttonText":"Find Insurers","customEventLabel":"","defaultProduct":"life","defaultZip":"","hideTitle":false,"id":"QuoteWizardQuoteForm--666","isAgeFieldVisible":true,"isDeltyForm":false,"isInsuranceTypeFieldVisible":true,"isInsuredStatusFieldVisible":true,"quoteWizardEndpoint":"https:\/\/quotes.valuepenguin.com","showTrustMessage":"true","style":"dropshadow","tier":"default","title":"Find Cheap Life Insurance Quotes in Your Area","trackingKey":"_life-insurance_variable-life-insura","trustMessage":"It's free, simple and secure. There are pros and cons to both options but we would typically recommend maxing out contributions to retirement accounts prior to investing in variable life insurance. Future death benefit amounts could increase or decrease by the return on the investment portion of a variable life insurance contract. Similar to whole life insurance, variable life insurance will provide a tax-free death benefit to your beneficiaries if you pass away, but it differs in that the money you put in is invested in subaccounts – similar to how mutual funds are structured. You can also pay a larger amount in premiums if you choose to do so. However, if your cash value significantly underperforms, it may reduce your actual death benefit, depending on your policy’s terms. Previously she was the Director of Product Marketing at CoverWallet, a commercial insurance startup, and helped launch NerdWallet's personal insurance business. If the cash value performs well, it can be used to increase the death benefit, withdrawn as cash or used as collateral for a loan. For more information please see our Advertiser Disclosure. A variable universal life insurance contract is a contract with the primary purpose of providing a death benefit. 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