Here at Elite Benefits Group, we want to help you get the right insurance for your needs. We also understand that the world of insurance can be confusing to those who are navigating it for the first time and are likely not familiar with its terms yet. In this article, we will focus on just one type of policy, variable life insurance, and provide a brief overview of what it is and how it works in order to help you make an informed decision about whether it is right for you.
A variable life insurance policy has three key components: the premium, the death benefit, and the cash value, which we will explain below.
- Premium- Just like other insurance policies, variable life insurance has a premium, or the amount you pay to keep the policy active. Each time you pay your monthly premium, some of that money goes to pay the insurer’s fees and keep the death benefit in place, but the rest goes toward the policy’s cash value.
- Death Benefit- The death benefit portion of a variable life insurance policy is the portion that your beneficiaries will inherit. This can be used to help cover your funeral costs and other final expenses after your passing.
- Cash Value- Variable life insurance also has a cash value, which you can invest in a variety of ways. Investing this cash value can lead to financial gains, leaving your loved ones with even more security after you are gone.