Variable Universal Life Insurance

Things to Know About Variable Universal Life Insurance

Variable Universal Life IS subject to market gains and losses. It is flexible but does not generally guarantee the death benefit unless you pay a higher premium, These life policies are NOT considered safe! Variable Life generally has higher fees because you receive all of the market gains and losses, so the insurance company charges management fees similar to a mutual fund. Most variable policies tout income guarantees to attract investors. Variable Universal Life is also flexible, so many investors put as little into their policies as possible. This is called under-funding and can be extremely devastating to cash values when combined with market losses. Over-funding is a must with Variable Universal Life! We would only recommend this for the savvy investor, and M3 Wealth does not sell Variable Universal Life products! Variable Universal Life can camouflage higher insurance costs and enhance performance if inflated returns are used in the projections. This is definitely not a “one size fits all” but could be likened to wearing oversized pants!

Watch this video to get additional information about the types of things you need to be aware of when purchasing life insurance.

How does it work?

Combines low-cost insurance with a savings component that is tied to an index, and not directly to the market!

What is the RISK?
There is absolutely no risk of loss in an indexed universal life policy. If the index goes up in a given 12 month period, you get a percentage of the gain… and if the index goes down or is negative for the year no interest is credited for that period.

You Get What You Pay For!

Indexed Universal Life is flexible so people generally try to get by putting as little into their policies as they can. This is called under-funding and can result in a loss of your guaranteed death benefit and the need to pay a higher premium in the future to keep the policy in force.

Building Cash Values!

If you overfund your Indexed Universal Life policy good things will generally happen. The trick is finding someone who can help you to maximize your cash growth by blending the proper amounts of term and permanent (indexed universal life) insurance.

Long-Term Potential:

Buying indexed universal life can protect your cash values, but it DOES NOT guarantee your premiums. So, I would recommend overfunding your policy and taking advantage of auto-drafting your premiums!

Finding a Place for Indexed Universal Life:

Universal life is affordable and has outperformed most savings rates even after the cost of insurance is deducted if overfunded. It is very flexible and can be customized to fit many different scenarios. It is not a one-size-fits-all, but it’s a lot like having an elastic waistband!

Enhancing your protection!

You can get death benefit guaranteed, great fixed interest rates (up to 25 times the savings rates), you can blend in term insurance, buy term insurance on your kids, get a waiver of premium if you become disabled, and a lot of other riders (additional types of enhancements).

AD&D: (Accidental Death & Dismemberment)

This type of insurance only pay in the event you are killed in an accident, if you die of normal causes, disease, or an illness, it DOES NOT pay!

How much Life Insurance do I need?

THE FORMULA:​DEBT: Add up all of your debt balances: $250,000.


​INCOME NEED: I need $60,000 to live on annually.

Use 3% return to calculate income – $2,000,000 (X) 3% = $60,000 a year of annual income


​​AMOUNT OF INSURANCE: In this case $2,250,000

*(Remember, this does not consider college savings, inflation or your potential tax liability)

When should I buy Life Insurance?

Watch this video to get additional information about the types of things you need to be aware of when purchasing life insurance.

Things to condsider when buying Life Insurance:

  1. Find the right agent. Make sure life insurance fits into your financial plan.
  2. Longevity – The carrier must be there to pay your claim.
  3. Check the companies ratings – What is their COMDEX score?
  4. Compare performance using the same interest rates.
  5. Building a self‑completing plan takes Life & Disability Insurance.

Annual Reviews

Banner Life is generally one of the top 5 term companies in the United States. If you run a quote and would like to compare your quote to other carriers please notify me below and I will be happy to run additional term comparisons for you!

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