Renwanz Insurance & Financial Solutions, Carlsbad, CA
Universal life insurance can be variable or fixed. They are simply two different types of Universal Life. Here are the basic definitions:
Variable Universal Life (VUL) is a form of life insurance that can build cash value. The cash value can be invested in separate accounts (similar to mutual funds) and the owner of the policy gets to choose which separate accounts are chosen, within the scope of what that particular product offerings are. The word "variable" refers to the fact the owner can invest in accounts that vary in value such as stocks and bonds. This variable component results in the cash value in your VUL increasing above or decreasing below what you put in.
Universal Life (UL) is a form of permanent life insurance where the excess in premium payments are credited to the cash value of the policy. If the cash value is referenced against a stock index such as the S&P 500, it is called an Indexed Universal Life (IUL) policy. An IUL does not put your money in the market but rather references the performance of that market over a measured period of time (such as a year) and credits you with interest if the referenced index has increased. Typically, the cash value of an IUL will not decrease as the result of that market declining - they would simply not credit your cash value account with interest for that particular year.
Universal Life Insurance, or UL, as it is written, is fixed. If you buy a Variable Universal Life policy, it will be labeled as such (or shortened to VUL). You cannot buy a Variable Universal Life insurance policy from an agent who is not registered with FINRA and licensed to sell securities. You can buy a UL from any agent licensed to sell life insurance.
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Variable Universal Life (VUL) is a form of life insurance that can build cash value. The cash value can be invested in separate accounts (similar to mutual funds) and the owner of the policy gets to choose which separate accounts are chosen, within the scope of what that particular product offerings are. The word "variable" refers to the fact the owner can invest in accounts that vary in value such as stocks and bonds. This variable component results in the cash value in your VUL increasing above or decreasing below what you put in.
Universal Life (UL) is a form of permanent life insurance where the excess in premium payments are credited to the cash value of the policy. If the cash value is referenced against a stock index such as the S&P 500, it is called an Indexed Universal Life (IUL) policy. An IUL does not put your money in the market but rather references the performance of that market over a measured period of time (such as a year) and credits you with interest if the referenced index has increased. Typically, the cash value of an IUL will not decrease as the result of that market declining - they would simply not credit your cash value account with interest for that particular year.