What Is Individual Flexible Premium Variable Life Insurance?

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   Jim Winkler

   CEO/Owner, Winkler Financial Group, Houston, Texas

   That is a great question! There are a couple of types of life insurance, each with certain functions, guarantees, and returns. The term policies are short lived, have a determined end date, and are very simple policies, with few frills. Whole life policies are a little more complex, but have sure guarantees of the payout, and cost of premiums. They are set, and guaranteed. Then there are the variable life policies. These are another type of animal altogether. They were designed to give the insurance consumer an option that was more like stocks or mutual funds in their ability to generate returns. The premiums are said to be "flexible", because you can overpay, pay the suggested premium, pay less than the suggested, or skip altogether one month. The catch is that this type of policy works off of the cash you put into it, and the ability of your investment choices to generate a positive return. Since there are typically very few (if any) guarantees, the risk of the performance is yours, not the insurers. This policy can cost you money, and go belly up, if you are not a wise investor, and able to make larger premium payments when needed.I will be honest - I like my clients to keep their money, and add to what they have in a safe and secure way. I do not recommend these policies to my clients. I hope that helps, if you would like more details, please feel free to contact me. Thanks for asking!

   Answered on November 10, 2014

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