What should be done if market conditions change while holding a VUL policy?

In the context of holding a Variable Universal Life (VUL) policy, it is essential to adapt to market conditions to ensure that the investment objectives and financial needs are met. When market conditions change, reviewing the policy is a prudent step. This review can help determine whether the current investments within the policy still align with the policyholder's overall financial goals, risk tolerance, and insurance needs.

The nature of a VUL policy, which combines life insurance with an investment component, means that the cash value often fluctuates with market performance. By regularly reviewing the policy, a policyholder can make informed decisions about reallocating investments, adjusting premium payments, or modifying the death benefit, thus ensuring that the policy continues to serve its intended purpose effectively.

In contrast, ignoring market changes can lead to missed opportunities for better performance or increased risk exposure. Making drastic decisions like withdrawing all cash value or increasing premium payments unnecessarily could have negative impacts on the policy's benefits and sustainability. Therefore, a strategic approach of reviewing and adjusting based on current conditions is the most effective course of action.