Variable Life

Variable life insurance provides death benefits and cash values that vary in accordance with the performance of a selected investment portfolio.  The policyowner may allocate premiums  among investment accounts that offer a wide range of risk and opportunity, from money market .

Variable life insurance is designed to combine the traditional protection and savings features of whole life insurance with the growth potential of investment funds.

Components:
General account :-is the reserve or liability account of the insurance provider, and is not allocated to the individual policy.
Separate account:- is comprised of various investment funds within the insurance company’s portfolio, such as an equity fund, a money market fund, a bond fund, or some combination of these.

Advantages of Variable Life Insurance Policies
*   The owner has more control over the performance of the cash account. They can choose between funds and change the allocation at will.
*  If the cash account does grow, the owner should not be taxed on the gain unless they sell the policy.
*  Life insurance  gains are not taxed. Beneficiaries can usually collect the death benefit without being taxed on it.

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