Variable universal life insurance was designed by combining a death benefit with a savings component to provide more flexibility within the policy. By splitting these components into separate accounts, all premiums are paid into the savings component and then deducted as needed to pay for the coverage and associated administrative costs. Anything left over remains in the savings account to potentially collect further interest through market indexes; however, this can also lead to a loss in cash value in the event of a market downturn.
Unlike a traditional universal life insurance policy that accumulates cash value to pay for a rising cost of insurance, variable universal life insurance policies contain sub-accounts that allow cash value to be re-invested. This exposure to market fluctuations carries more risk, yet can provide significant returns if the market is performing well or result in a net loss if the market doesn’t perform as expected. For this reason, policyholders must carefully assess the risks involved before investing in a variable universal life insurance policy. If you are against the potential risks involved, you will likely be more comfortable with a separate life insurance policy.
Anchor Financial Group is dedicated to providing our clients with the options needed to make the most of their financial planning. While the risk involved with a variable universal life insurance policy isn’t for everyone, it can be effective under the right circumstances. If you would like to learn more about variable universal life insurance, our brokers would love to hear from you. Even if this plan isn’t for you, we are sure to have the perfect fit for your unique needs.
Ready to Get Started?
If you are ready to focus on your financial planning, the Tulsa financial planning experts at Anchor Financial Group are ready to assist you. As a Veteran-owned brokerage firm, we always look out for the best interest of our clients. Please call us at (918) 591-2880 to get started or Contact Us and a friendly member of our staff will reach out to you promptly. We look forward to assisting you in achieving your financial goals in Tulsa.
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