For some time savvy investors might choose to buy term life insurance for the low premium rates. They would then take the money saved by choosing term life over a universal life insurance policy and invest it in stocks and bonds. The yield on investment using this method was almost always greater than the amount of cash value that builds in a whole life insurance policy.
The introduction of variable universal life insurance has begun to change this investor behavior. The variable option allows you to choose the security of whole life insurance coverage for life while allowing the policy holder to direct where his premiums are invested.
Lincoln Variable Universal Life Insurance Vs. Term Life Insurance
A variable universal life insurance policy provides insurance for life (or at least till age 95) and does not need to be renewed. There is no necessity to submit to additional medical exams or face higher premium costs. Term life policies must be renewed or replaced when the term has expired. The renewed policy will have a higher premium if only because you are older than you were when the policy was initiated. Other factors such as lifestyle and health issues can cause the premiums of a renewed term policy to skyrocket.
When deciding which type of life insurance you need its good to balance the savings of buying term life insurance with the security of a whole life policy. If there is a history of disease in your family you can’t ignore the possibility that it might affect you in years to come. The significant savings of term life insurance may be what you need to suit your budget but also consider whether the current savings are enough to justify the safety factor of a policy that will last a lifetime. For some, the decision may be to purchase a smaller whole life policy and also a term policy that will provide additional protection.
Benefits of Lincoln Variable Universal Life Insurance
Invest part of your cash value accumulated in a variable universal life insurance policy into growth products on the stock market. You have the ability to invest for greater growth of your cash value that can easily match the lower premiums charged by term health insurance.
These flexible life insurance policies allow you to pay premiums in advance. If you expect a change in income or expenses in the months to come you can pay those insurance premiums in advance and then not worry about them for a while. You also have the freedom to increase the coverage offered by your variable universal life insurance policy with a premium increase that only reflects the additional coverage provided.
The variable universal policy can also be used as a financial asset as the cash value accumulated can serve as collateral for loans from your bank. Term life insurance does not carry this flexibility as no cash builds with a term policy. The advantages of variable universal life insurance are clear and this is the choice of many who view buying life insurance as a true investment.
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