Flexible protection with long-term growth potential.

A variable life insurance policy can be a good fit for people who want a permanent life insurance policy and the chance to build cash value through investments.

*This overview is for general information only. An agent can walk you through details for your situation.

What Is Variable Life Insurance?

Variable life insurance is a permanent life insurance policy that includes a built-in investment component. Part of your premium payments goes toward the cash value component, which you can place in a range of investment options such as mutual funds, a bond fund, or a fixed account.

Because your policy’s cash value and death benefit can move up or down based on investment performance, it suits people with a higher risk tolerance and long-term investment objectives.

Most people compare it to whole life insurance, which uses fixed returns, or term life insurance, which lasts for a set number of years.

Variable life is different because it links your growth to market results and keeps permanent coverage in place as long as you pay premiums and maintain sufficient cash value.

How Variable Life Insurance Works

Here’s a simple way to think about it:

• You make an initial premium payment and ongoing fixed premium payments (some variable life policies offer flexible premiums, depending on the insurance company and policy).
• The policy builds cash value and often receives favorable tax treatment under current law, though your situation may be different, giving you potential cash value growth over time.
• Your life insurance company invests that cash in your selected underlying investment options.
• Your policy’s death benefit and death benefit amount can increase if your underlying fund performs well.
• Poor markets can reduce the cash value, meaning you could lose money if performance drops and fees outpace gains.

Many policies may include a minimum death benefit, depending on the insurance company and policy design, which protects your family even if your investments decline. Some also offer an additional death benefit tied to strong investment growth.

Why People Explore Variable Life Insurance

A variable life insurance policy may make sense if you want:

Long-term financial protection

Your beneficiaries receive an income benefit through the policy’s death benefit, typically free from federal income tax and income tax.

Potential for growth

Your cash value grows on a tax deferred basis. This is one of the main ways variable life insurance offers tax advantages, though you should always consider tax implications and possible tax consequences.

More control

You pick your investment options and build a strategy that fits your style, whether you want a bond fund, a stock-heavy fund lineup, or the safety of a fixed account.

Access to cash

You can use policy loans to tap your policy’s cash or cash account, though loan interest and ongoing fees apply and may reduce your benefit.

If you’re unsure whether this is the right fit, a agent at The Huneycutt Group can help you compare it to whole life, term life, and other forms of permanent life insurance.

What You Should Know

Variable life can be powerful, but it comes with risk and trade-offs:

• Investment risk. Growth depends on the market. If performance drops and there isn’t enough cash value, the policy could lapse unless you add more money.
• Sales fees, sales expenses, transaction fees, management fees, and ongoing fees can affect returns.
• Policies may have a surrender charge period if you cancel early.
• You’re responsible for monitoring the investment component and making sure your investment strategy matches your comfort level.
• If you withdraw too much or cancel at the wrong time, you may trigger tax consequences or federal taxes.
• Some policies include a no lapse guarantee, though terms vary by insurance company providing the coverage.

Variable Life Insurance vs. Other Policies

To see how these differences play out with real quotes, talk with an agent.

If you want predictable results, whole life or term might feel simpler. If you want long-term growth and can handle market swings, variable life may be a better match.

Who It’s Right For

You may want to buy variable life insurance if you:

• Have a long-term view and don’t mind market ups and downs
• Want the chance to increase your death benefit over time
• Are comfortable managing or reviewing investments on a regular basis
• Want potential investment growth beyond traditional insurance
• Have a stable financial situation and steady monthly income
• Are looking for ways to manage estate tax exposure

Not everyone needs variable life. The goal is to match coverage with your life, your family, and your future.

Work With The Huneycutt Group

Choosing a life insurance policy isn’t easy, especially when each type has its own structure, costs, and tax advantages. The Huneycutt Group assists clients across North Carolina with these decisions every day. We compare policies, break down numbers, and help you find coverage you can rely on.

Talk to an advisor at The Huneycutt Group today. Get clear answers and a plan that fits your goals.

Whether you’re ready to move forward with a variable life insurance policy or want to see how it stacks up against other insurance coverage, we’ll walk you through the options and outline what to expect from each insurance policy.

Request your personalized life quote from The Huneycutt Group.