Variable Life has death benefits and cash values that vary with the performance of an underlying portfolio of investments that you select. The death benefit and cash value are not guaranteed. They can go down as well as up, although there may be a guaranteed minimum death benefit. Variable Universal combines the premium and death benefit flexibility of universal life with the investment flexibility and risk of variable life. The proceeds of many permanent life insurance policies can be used to ease the financial burden of catastrophic illness, terminal illness or long-term care.
Any unpaid interest is added to the loan.
Any unpaid loan, including interest, will be deducted from the death benefit. The cash value can be used to pay premiums for a period of time, keeping the stated death benefit, or it can be used to purchase paid-up insurance in a lesser amount with no further premiums due. If there is no living beneficiary, the proceeds will be paid to your estate and have to go through probate proceedings, resulting in a possible delay before your family receives the money. If the proceeds go into the estate, these proceeds may be subject to estate taxes. For more information on life insurance, you can access the Life and Health Foundation for Education or the American Council of Life Insurance .