What is Variable Universal Life Insurance (VUL)?

Variable Universal Life Insurance (VUL) is characterized as a flexible premium life insurance policy that combines life coverage with an investment component. This means that policyholders have the ability to adjust their premium payments and death benefits according to their financial needs and goals. Moreover, a significant feature of VUL is that a portion of the premiums can be allocated to various investment accounts, which may fluctuate in value based on the performance of the chosen investments, such as stocks or bonds. This aspect allows for potential growth of cash value within the policy, alongside providing a death benefit to the beneficiaries.

The flexibility in premium payments and the investment option are key distinguishing factors of VUL compared to other types of life insurance products. This makes it attractive for policyholders who are comfortable with investment risks and seek to have a more personalized approach to their life insurance coverage and investment strategy.