First of all, why are you buying life insurance? The basic rationale for life insurance is to replace your income in the event that you die unexpectedly. Your insurance policy then is supposed to “buy” your dependents’ time to replace the income they had depended on you.
Strictly speaking, life insurance is primarily for protection, not an investment or a savings plan. However, today’s insurance companies offer products with savings plans and investment features. These are what you call variable life insurance.
Variable life insurance vary from one insurance company to another. These insurance companies customized their insurance products to suit their clients needs. There are insurance products that give you the amount of your insurance coverage at a fixed time in the future in case you don’t die during that stipulated time. Protection aside, variable life insurance also give you profit based on the performance of the insurance companies’ investments.
The bottom line for variable life insurance is that these insurance products combine life protection and investment benefits with premium payments. In such cases, you need to know how much of your premium goes to protection and how much to investing. You should ask these to the insurance agent when getting a variable life insurance product. When you understand exactly how much yield you will earn on the investment portion, you can decide whether it’s better for you to just buy term life insurance and invest the difference yourself – assuming you are financially literate enough to know what are the other investment options.
If you are interested in this kind of investment, contact me at [email protected] or at +639175227088.
Here is a video from Pesos and Sense explaining more about Variable Life Insurance: