| Variable life insurance offers the | | | | investments perform poorly the |
| ultimate in life insurance flexibility. | | | | policyholder accepts the consequences |
| The main principle governing variable | | | | that there will be little or no cash |
| life insurance is that you control your | | | | surrender value when the insurance is |
| life investments instead of the life | | | | redeemed. |
| insurance company managing them on your | | | | Is variable life insurance for you? |
| behalf. This enables you to select the | | | | It is very important to think long and |
| level of risk that you subject your life | | | | hard about variable life insurance |
| insurance fund to, paving the way for | | | | before opting to take it on, as there is |
| you to make substantial interest gains | | | | a high level of risk involved with this |
| on the cash-in value of your life | | | | type of life policy. Ideally, variable |
| insurance policy. | | | | life policies should only be taken out |
| How does variable life insurance work? | | | | by seasoned investors who know there way |
| All life insurance products are a form | | | | around the investment markets. If you've |
| of investment vehicle. Standard no | | | | never invested in the stock market |
| cash-in value life insurance policies | | | | before then a variable life policy is |
| like term life insurance invest life | | | | probably not for you. |
| insurance premiums in ultra low-risk | | | | However, if you are confident in your |
| funds that are often obliged to return a | | | | investing abilities this is what you |
| certain level of interest. This provides | | | | stand to gain from taking out a variable |
| the life company with confidence in | | | | life policy... |
| receiving a tangible level of return, | | | | 1. Variable life policy potential: |
| which is transferred through to the life | | | | A variable life policy has the potential |
| insurance policyholder by way of a | | | | to make substantial interest gains that |
| guaranteed lump sum payment upon death | | | | are much higher than on a standard term |
| or terminal illness. | | | | life insurance policy. Whereas you might |
| Variable life insurance is different | | | | pay a small premium per month for a |
| from standard types of life insurance as | | | | £100,000 pay out upon death with a |
| the life company hands the investment | | | | standard policy, if you invest well with |
| reigns over to the policyholder. The | | | | a variable life policy that £100,000 |
| life company may allow a percentage of | | | | could be worth £500,000 or more when |
| the fund to be invested, or in some | | | | redeemed! |
| cases, all of the fund to be invested by | | | | 2. Tax advantages: |
| the policyholder. Variable life policies | | | | The cash surrender values of variable |
| come with the disclaimer that the life | | | | life policies are exempt from taxation |
| insurance company takes no | | | | until the point at which they are |
| responsibility for the performance of | | | | redeemed. Also, gains made via variable |
| the variable life policyholder's | | | | life policies are not subject to capital |
| investments. Therefore, if the | | | | gains tax (CGT). |