Variable Life - 26/30

T1-L2-P26

 

 

Variable Life

In the diagram above, note that premium dollars flow into the policy on a regular basis (Traditional Variable Life does not have a flexible premium). After the mortality charges and the loading charges are drawn off, the balance is used to purchase units of open-ended mutual funds (separate accounts) selected by the policy owner. When a person purchases a Variable Life contract, he/she is in effect, dollar-cost-averaging into his/her cash value account. The policy owner can have his/her net premium dollars split among a number of funds. (The illustration shows distributions into funds A, C. & E. The accumulations may be moved, with some restrictions, among the family of funds).