A Guide to Purchasing a Variable Universal Life Insurance Policy

Feb 06 2011

A Guide to Purchasing a Variable Universal Life Insurance Policy

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Variable universal life insurance policies are policies which build a cash value. This cash value can in turn be invested in a wide range of separate accounts, depending on the policyholder. Purchasing this type of life insurance policy is easy, since most insurance companies offer them. Here are the steps on how to buy a variable universal life insurance plan.

1. First off, you need to make sure that you are comfortable with the risks associated with the ups and downs of the market, as “variable” basically means that the returns on the invested cash values as well as the death benefit that they support are not guaranteed.

2. You should then determine how much life insurance coverage you need. There are several factors that you need to consider for this, including your age, financial status and health condition.

3. Visit the websites of several insurance companies, especially those which provide free quotes and other useful information on life insurance policies. As you visit these websites, list down variable universal life insurance quotes from at least three different companies. Aside from the quotes, be sure to note the key features and benefits of the policies as well.

4. If you have any questions about a certain policy, be sure to contact the insurance company via email, phone or chat, depending on the customer service channels that they have. This would ensure that all of your questions and concerns would be answered before you decide to go for a specific life insurance policy.

5. You might also want to get recommendations from relatives and friends, especially from those who already have variable universal life insurance policies. Ask them about the coverage that they have and the interest that they are able to earn from the cash accounts of their policies.

6. You can also consult an insurance agent as to which policies would best suit your needs; however, make sure that the insurance agent is knowledgeable and experienced enough to provide you with the best options.

7. If possible, go for the top-rated insurance companies rated by some of the biggest rating services like Duff & Phelps and AM Best.

8. Study all your options and carefully review the investment goals and the fees of the policy.

9. Once you have decided on a variable life insurance policy, you can either purchase it online or offline. After being underwritten, you can then allocate your premium payments and your cash values in the separate account of the policy, based on your general investment objectives and risk tolerance.

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