Which statement describes a variable life insurance policy?
Which statement describes a variable life insurance policy?
A variable life policy invests premiums in a separate account holding a designated mutual fund, usually a growth fund. The insurance company gives a minimum guaranteed death benefit, which cannot fall below a set amount, regardless of how poorly the separate account performs.
What is variable life insurance quizlet?
What is Variable Life? -Permanent life insurance with investment flexibility. -Level premium. -Policyholder’s separate investment account for cash value (CV)
Is variable life insurance the same as whole life?
Whole life insurance and variable life insurance are permanent life insurance policies. Whole life insurance has level premiums and death benefits. In addition, the account can accumulate a cash value but cannot be invested. Similarly, variable life insurance allows for the accumulation of cash value.
What are variable products in insurance?
What Is Variable Life Insurance? Variable life insurance is a permanent life insurance product with separate accounts comprised of various instruments and investment funds, such as stocks, bonds, equity funds, money market funds, and bond funds.
What differentiates variable life insurance from variable universal life?
Variable life has fixed premiums that you can predict for the entirety of the policy, while universal life insurance has flexible premiums that can be paid for with the cash value. Both also accumulate cash value that you can use while you are alive.
What is whole life policy describe the main kinds of whole life policy?
Whole Life plan is also called as straight life, ordinary life. It remains throughout the insured whole lifetime provided the premiums are paid. A certain aforementioned amount is paid to the nominee in the event the insured dies. The policyholder at any time withdraw the policy or borrow against it.
Does variable life insurance have a cash value?
Variable life insurance is a permanent life insurance policy with an investment component. The policy has a cash-value account, which is invested in a number of sub-accounts available in the policy.
What is ordinary whole life insurance?
Whole life insurance is a type of permanent life insurance that provides coverage for as long as you live. Also known as straight life or ordinary life, these policies build a cash value that buyers can borrow against in retirement.
What is a variable insurance trust?
NVIT Funds are not sold to individual investors. They are sold only to separate accounts of insurance companies to fund benefits payable under variable annuity contracts and variable life insurance policies issued by life insurance companies.
In what way is a Variable Life policy superior?
Greater potential return than whole life. Despite not having the guaranteed investment returns of other types of permanent insurance, variable life insurance does have a greater range of investment options, such as subaccounts similar to mutual funds, that have the potential to increase long-term returns. Feb 15, 2019
What is variable life insurance What are the advantages and disadvantages of Variable Life policies How can individuals avoid the high fees of variable life insurance?
An advantage of variable life policies is that: policyholders have flexibility in making their own investments. Individuals avoid the high fees of variable life insurance by: purchasing lower-cost term insurance and investing the cost difference.
Which statement is true about variable annuities?
Which statements are TRUE about variable annuities? The best answer is C. There is no tax deduction for contributions made to a variable annuity contract. The major advantage is the tax-deferred build-up of earnings in the separate account.
What is the difference between a variable annuity and variable life insurance?
Variable annuity vs. variable life insurance. The primary difference between a variable annuity and variable life insurance is that with the former you will receive your investment back in a series of payments from the insurer. Dec 8, 2021
Which of the following is a feature of a variable annuity?
A typical variable annuity offers three basic features not commonly found in mutual funds: tax-deferred treatment of earnings; a death benefit; and. annuity payout options that can provide guaranteed income for life.
What is a variable death benefit?
A variable death benefit is the amount in an investment account paid to a decedent’s beneficiary from a variable life insurance policy. The investment account or cash value account within a variable life insurance policy is used to invest in stocks or equity mutual funds for returns.
