What is a critical feature of VUL policies compared to traditional life insurance?

The defining characteristic of Variable Universal Life (VUL) policies is their combination of flexible premiums and the ability to have a cash value component that is linked to various investment options. This flexibility allows policyholders to adjust their premium payments and death benefit amounts according to their financial needs and circumstances, making VUL distinct from traditional life insurance, which typically has fixed premiums and benefits.

The cash value accumulation in VUL policies is not static; it can fluctuate based on the performance of the selected investments, providing the potential for higher returns compared to the guaranteed cash value in traditional whole life policies. This investment aspect enables policyholders to tailor their coverage and savings strategy more closely to their personal financial goals, which is a key advantage of VUL over traditional life insurance options.

The flexibility in premium payments and the investment link is what distinguishes VUL policies and appeals to those looking for both life insurance coverage and investment opportunities.