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Is Variable whole life insurance a good investment?
When making a decision about an investment I would always reccommend you look at guarantees! Whole life....Guaranteed. Variable Whole Life.....? If you are going to make investments in variable then why would you not buy Mutual Funds? You still need life insurance for protection and as a plan of completion, I would just look closely at Variable. EVERYONE needs whole life.
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Variable universal life insurance combines the flexibility of auniversal life insurance with the investment account features of avariable life insurance. Like variable life in…surance, variable universal is considered asecurity. It can only be sold by agents who have passed theNational Association of Securities Dealers (NASD) exam. Answer Variable life insurance allows you to control your portfolio ofinvestments that is part of the cash value component of a wholelife insurance policy. This could include stocks, bonds, or funds.As a result of this freedom, this is the most expensive type ofinsurance available in the market. Opt for such a policy only ifyou are completely confident about investing in the markets. Whilethe risks may obviously be higher as there is no guarantee on yoursavings, the value benefits are also much more than any otherinsurance policy available. Answer Variable Universal Life insurance is permanent life insurance thathas a cash value feature in it. The cash value is invested in asmall selection of portfolios. Since it is invested, there is noguarantee interest and it may lose value. When you pay yourpremiums, you are paying for three things: The insurance, the cashvalue, and investment fees. If you know anything about mutualfunds, mutual funds have their own annual operating expenses. Sincethese mutual funds are invested in a life insurance policy, you arepaying more than 5% of annual expenses. Therefore, you will get alow rate of return on your cash value. Every year, the cost of the insurance goes up. The insurance partof the policy is annual renewable term. That means more of yourpremiums is going to the insurance and less toward the cash value.Eventually, you will have to pay higher premiums in the future. Ifyou don't, the policy will eventually lapse as the cash value isdepleted.
Fees are higher in a Variable annuity than they are in say a fixed Index Annuity.
Whole life insurance is a life insurance policy thast remains in full force and effect for the life of the insured, with premium payments being made for the same period.… It gives you lifetime coverage as long as you pay the premiums. This type of policy may build cash value within the policy.
Whole life insurance gives you lifetime coverage at a premium rate that does not increase with your age after you buy. In the early years of the policy, when you're a low risk…, you'll pay more in annual premiums than it costs to insure you. As you become a higher risk at an older age, the level premium eventually becomes less than the amount it takes to insure you. Level premium payments build a reserve in your policy that is used to insure you as you age. Insurance companies call this reserve the "cash value." Click here for more about the different types of whole life insurance and the different ways to pay the premiums. Here's some information from consumer organizations and state departments of insurance. Whole Life Insurance Whole life is a type of life insurance that builds a "cash value". The first 2-4 years you pay your premium, none goes into your cash value. The fees and expenses of the policy take that portion of your premium. After the 2-4 years pass, you begin to accumulate a cash value. If you want your money out of your cash value, you borrow it, typically at 6%-8% interest rate. Which, you pay the interest to the COMPANY, not back to yourself! Not only that, but when you die, the company will KEEP your cash value. Assume you have $2,000 of cash value, and your death benefit (insurance coverage) is $50,000. Your beneficiary only gets the $50,000 -- the insurance company keeps YOUR $2000 of cash value. The idea behind whole life, is that at the age of 100 you'll accumulate in your cash value your death benefit amount. So, up until that point, the insurance company takes the difference of your death benefit amount and your cash value, and they pay the difference. By the way, if you borrowed your $2,000 and then died, your beneficiary would only get $48,000!!! Look in your policy. There is a table which projects your cash value amounts throughout the years of your policy. One column says what your death benefit is. Notice how that stays level, even as your cash value goes up. It's because the cash value is NEVER REALLY YOURS!!! Your beneficiary will only get your coverage amount, NEVER the coverage amount PLUS the cash value!!! Note that whole life policies are designed to mature at age 100. The assumption is that you will not live that lon g but if you do your premiums are considered paid in full and and the cash value in the account has reached the face value of the policy. Insurance companies at this point will issue checks for the full value and the contract is considered completed. A type of permanent life insurance, whole life insurance is applicable for a lifetime. Generally the life insurance premiums remain fixed for the entire span of the policy, and are therefore on the higher side. With a cash value component, this type of policy has investment benefits for the insurer, which can be made accessible through policy loans or surrenders.
Adjustable whole life insuranceAdjustable whole life insurance allows you to vary your coverage as your insurance needs change. You normally choose the face amount you need an…d the premium you want to pay, and the company calculates a plan that provides coverage for your request. The result could be any plan from a term policy with a short period to a limited-payment whole life policy. You can also choose the type of plan and face value you want, leaving it to the company to calculate the premium rate needed. Also known as flexible premium adjustable life insurance, adjustable life insurance is recommended for those who want flexibility with their insurance policy along with the cash value benefits and protection. As the family and circumstances change over time, the insurance holder can customize the coverage and modify payments and terms. Along with the investment component of such a policy, other benefits include the ability to modify the term of coverage, increase or decrease the premium rate, change the term of the policy and lower or raise the face amount.
under this type of policy, the insured pays premiums for his or her entire life :) thankkk emery.s (;
%REPLIES% Answer Variable life insurance differs from whole life insurance and universal life insurance in that policy owners direct …the distribution of their premium payments among several different accounts or funds rather than of the company's choosing. Typical account choices are: common stock, bond, mortgage, and money-market accounts. With a variable policy, the death benefit and cash value benefits vary in relation to the value of the investments underlying the policy. If the value of the accounts increases, so will the benefits; if the value of the account decreases, so will the benefits, subject to a minimum guarantee. Variable life insurance is more risky to the policy owner than the other forms of cash value insurance, but there is a possibility of greater returns. In fact, variable life insurance is so much like "normal" investing that agents offering it must be licensed securities dealers and registered with the U.S. Securities and Exchange Commission. For Insurance � a free service that connects consumers with insurance agents and policies � recommends that variable and variable-universal policies are most suitable suitable for long term obligations and those who are more active investors and for estate growth and death tax liquidity. Answer In Response to Chris' prior response. "Variable" means it is not a fixed account, but in subaccounts directed according to the policy owner's wishes. These subaccount include, but not always, popular funds like the ones offered by Fidelity Investment. They all have there field of investments. Some are Blue Chip stock funds, Over-seas funds and even more simple Government Bond funds. Money Market is a choice. The choices can be endless and the owner picks % of the net premium paid after expense to go to each Sub-Account. Your Death Benefit will stay the same if you choose the Level Death Benefit option. Your benfit will be payable as long as premiums are paid and there are funds in the accumulation account connected to the subaccounts. You can also choose an Increasing Death benefit that includes the Face ammoun, the amount of insurance on your life, plus the value of your funds. You have choices but get a good agent licensed to sell Variable Contracts. he will need his Series 6 and usually series 63 securties license.
You can but make sure it is the correct thing to do. Once cashed it you can never get it back. Depending on your age (over 45) and the policy value, you may get more mon…ey by selling it to a life settlement company. You can call 866-670-8189 for more information.
Whole Life insurance is not a security. Because there is a guaranteed cash value during any year the policy is in force there is no risk of loss of principle (unlike a securit…y that has no principle guarantee to the owner). Being a unilateral contract the insurance company must contractually pay out the cash value at any time the policy owner requests it (or at any time pay out the guaranteed death benefit upon the death of the insured). With the market unsteadiness we have seen the last several years, whole life insurance is once again becoming popular because of its guarantees (both death benefits and cash values).
Saga Insurance is a good investment. Seniors and older people may find that a fixed income investments comes with less financial risk. It allows them to have a fixed monthly i…ncome, perfect for retirement.
Variable life insurance is a form of life insurance which protects the beneficiary upon death. The main advantage to this type of life insurance is that this insurance allows …for many investing opportunities whilst the earnings being tax free.
Whole life insurance is not necessarily bad but it may not be right for you as it can be substantially more expensive than a term insurance. If you need life insurance but don…'t want to pay the high premiums on whole life insurance ask for term insurance quotes. Whole life insurance is a level premium from the time you get the insurance until you die which is good if you have an estate that will need liquid funds but not necessarily right for someone who is just looking for life insurance until their kids are grown or their mortgage is paid off
It is a cash value policy with a death benefit that gradually increases to the full death benefit over time usually a period of 3 years. This type of policy is offered t…o people with medical conditions that may otherwise make them unable to buy life insurance. If you are healthy you do not want this type of policy.
Whole life insurance, as the name implies, is insurance which provides coverage for the policyholder's entire lifetime. Whole life policies can be divided into two categories…: participating and non-participating. Both policies provide level premiums, lifetime protection and a guaranteed cash value-but participating whole life plans pay an annual dividend. The annual dividend is NOT guaranteed, and in most instances is linked to long-term interest rates as well as the insurance company's performance. If you have an existing participating whole life policy which was purchased in a high interest environment, it is a good idea to request an updated policy illustration-the projected values may have changed dramatically. Most participating whole life policies have multiple dividend options.
Term insurance is written for a specific period of time or until an age certain (the term). It may be for 1 year, 5 years, 10 years or it may be until age 60, 65, 70, etc. At …the end of the term the insurer may cancel the policy, raise the premium, reduce the benefit, or some combination of these. Some policies are guaranteed renewable by the insured but always at a higher premium or smaller benefit. Whole life insurance lasts your whole life. The monthly premiums are higher at the beginning but remain level (no increase) throughout the premium paying period. Because of the reserve which is built up inside the whole life policy the insured has more benefits such as cash value, policy loans, paid-up insurance, or extended term coverage.
A Vanguard variable annuity does seem be a good investment in the current market. As with any investment, there are no guarantees of profitable returns.
No life insurance is a solid investment. Life insurance is a valuable tool, but it's an EXPENSE. Whole life insurance is a pricey expense. It's great for the insurance company…, great for the agent that sells it to you but lousy for you as the end buyer.