What is the purpose of the prospectus in VUL policies?

The purpose of the prospectus in Variable Universal Life (VUL) policies is to provide detailed information about the investment options available within the policy, including performance, risks, and fees. VUL policies incorporate both a life insurance component and an investment component, which makes the prospectus a crucial document for policyholders. It allows them to make informed decisions regarding where their premium payments are invested.

The prospectus typically includes data on various investment funds available under the policy, which can include performance history and an explanation of the risks associated with these funds. Understanding these details is vital for policyholders as it affects their potential returns and the overall performance of their investment within the policy.

Furthermore, while tax benefits, policyholder responsibilities, and the historical performance of the insurance company may be important for overall understanding of a VUL policy, they are not the primary focus or purpose of the prospectus itself. The key function of the prospectus is to detail investment options and related information, allowing policyholders to navigate their choices effectively.