Variable Life insurance is based on what kind of premium? Reason: Variable Life insurance is a level fixed premium investment based product.

What kind of premium is variable life insurance?

A variable life insurance policy is based on level-fixed premium. as the cash value component increases, premiums decrease. Every time a premium payment is made, portion of it goes to the cost of insurance and the cash value.

What is variable life insurance quizlet?

-Variable life insurance offers fixed premiums, a flexible death benefit and the ability to earn a variable rate of return. -variable life combines the protection and savings functions of traditional life insurance with the growth potential of mutual fund investments.

What is a variable premium?

Definition. Variable Premium Life Insurance — a life insurance policy that allows the insured to vary the premium payments subject to certain limitations. The policy benefits and cash value vary with the premium payments. The most common form of variable premium life insurance is universal life insurance.

Does variable life insurance have fixed premiums?

Therefore, these policies are sometimes referred to as flexible premium variable life insurance. While variable universal life insurance policies typically have minimum and maximum premiums, you’re free to pay whatever amount you choose that falls within these limits.

What is a variable life insurance policy?

A variable life insurance policy is a contract between you and an insurance company. It is intended to meet certain insurance needs, investment goals, and tax planning objectives. It is a policy that pays a specified amount to your family or others (your beneficiaries) upon your death.

What type of premium do both Universal Life and Variable Life policies have quizlet?

Both Universal Life and Variable Universal Life have a? Graded-Premium Whole Life policy premiums are typically lower initially, but gradually increase for a period of 5 to 10 years.

Which of the following are the features of a variable life insurance policy quizlet?

Variable life policies have fixed, level premiums. Variable life policies guarantee a minimum death benefit, which is why premiums are fixed and level.

How is a variable universal life insurance policy different from a universal life insurance policy quizlet?

Universal life gives the policyholder the flexibility to skip some premium payments. Variable life invests premiums in a separate account and typically invests in equities, whereas both whole life and universal life invest premiums in the general account, which must be heavily invested in fixed income securities.

Which is true regarding a variable whole life policy?

Which statement is true concerning a Variable Universal Life policy? With Variable Universal Life, the policyowner controls the investment of cash values and selects the timing and amount of premium payments. Consideration is given by the insurer by promising to pay a death benefit to a named beneficiary.

What differentiates variable life insurance from variable universal life?

Variable life insurance is a type of permanent life insurance with a cash value and with investment options that work like a mutual fund. Universal life insurance is a type of permanent life insurance with a cash value that grows based on the current interest rate set by the insurer.

What type of premium do both universal life and variable universal life policy have?

A combination of Universal Life and Variable Life. Provides the policy owner flexible premiums and an adjustable death benefit.

What are variable insurance funds?

Variable life insurance is a permanent life insurance policy with an investment component. The policy has a cash-value account, which is invested in a number of sub-accounts available in the policy. A sub-account acts similar to a mutual fund, except it’s only available within a variable life insurance policy.

What is considered an element of a variable life policy?

Variable universal life is a type of permanent life insurance policy with features that include cash value, investment variety, flexible premiums and a flexible death benefit.