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