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Characteristics
Premiums are invested in equities, bonds, and/or money market funds; Return varies based on investment performance of funds selected; death benefit will not drop below the guaranteed minimum if provided for in the policy
Market
Permanent need for life insurance; investment oriented and willing to assume risk
Death
Benefit
Varies based on investment performance; Two options: A - level death benefit, B - face amount plus cash value
Benefit Premium
Flexible at option of policyowner; may be skipped if values will support the policy
Cash
Value
Varies based on investment performance; no minimum cash value
Advantages
To Buyer
Policyowner selects where cash value is invested and can redirect investments to increase opportunity for growth; Minimum guaranteed death benefit; Cash values can be borrowed; may be able to skip premium payments
Disadvantages
To Buyer
Policyowner assumes investment risk; No guaranteed minimum cash values; additional premiums may be needed to maintain face amount if investment performance is poor; policy lapses if premium is not sufficient; surrender in early years could be costly; death benefit may be less than anticipated if market is down at time of death; cash values may decrease or be lost
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