The policyholder specifies where to invest account funds, based on his/her risk profile.
Universal Variable Life Insurance policies provide two options:
- Incremental: Benefits in case of death increase as the account value grows. Beneficiaries will receive the basic insured amount plus the accumulated account value.
- Capped: Benefit in case of death remains constant throughout the life of the policy.
When benefits in case of death come from incremental policies, they are directly related to the return on investment. On the other hand, in the case of a capped policy, benefits are always the same. The account value always varies based on performance of assets in capital markets. Thus, savings are subject to return on investment.
Another fundamental feature of these types of policies is their flexibility, which allows you to:
- Invest in various investment profiles, through ETFs (Exchange Traded Funds/Indexes), which allow you to participate in the world’s top capital markets.
- Select premiums, amounts, frequency (maximums and minimums apply), and special contributions.
- Use accumulated funds through partial or total surrender amounts, and surrender value-based loans. This provides certain level of liquidity during the life of the policy.
- Choose insured amounts, capped or incremental.
- Establish financial goals. These policies provide a space to create disciplined savings and investments.