Variable Universal Life- a type of universal life product that has no guaranteed cash values. Variable universal life is like traditional universal life with it’s unbundled features and flexible premiums/death benefits. On the other hand, current interest on a variable universal life plan is credited based on the performance of stocks, bonds, mutual funds, and other investments that the policyholder selects. This permanent type of insurance provides lifetime coverage on the insured and may not require premiums for the entire term if performance warrants. Variable universal life is sold by a prospectus and regulated by the SEC. Because it is a securities products, and not a fixed insurance product, it is primarily regulated by the Securities and Exchange Commission.

ADVANTAGES OF VARIABLE UNIVERSAL LIFE

• High potential cash value accumulation
• Provides coverage for the lifetime of the insured
• Flexible premiums and death benefits
• Optional guaranteed death benefits
• Allows policyholder to take control of fund allocation

DISADVANTAGES OF VARIABLE UNIVERSAL LIFE

• Does not guarantee a minimum cash value
• Policyowner assumes the risk
• Death benefit can decline due to underperformance of subaccounts
• Premiums may need to be readjusted due to underperformance of subaccounts

Value proposition of Variable Universal Life:
high cash accumulation