There are two types of variable life insurance - variable whole life and variable universal life. Under a variable whole life policy the death benefit may increase or decrease depending on investment performance, but will not fall below the guaranteed minimum, provided the required premium is paid. The primary difference is that under the VUL design the policyowner directs the investment of cash values among a variety of investments and assumes all of the investment risk. In addition, most variable universal life policies do not guarantee a minimum death benefit. Annuities Annuities are either deferred or immediate.
Deferred annuities provide income payments that begin at a later date.
The primary reason for purchasing a deferred annuity is to accumulate money on a tax-deferred basis, which can then provide an income at a later date. Immediate annuities are contracts which begin paying installments generally within 12 months of the premium payment. The main reason for purchasing an immediate annuity is to obtain a regular income, most frequently for retirement purposes. Deferred annuities can be either single premium or flexible premium. Flexible premium contracts on the other hand permit the contract owner to make additional contributions after the initial premium.