Variable/Equity Indexed Life Insurance Tips

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Variable Life Insurance

The performance of the cash value in a variable life insurance policy is tied to the stock market. When you choose a variable life insurance policy, you’ll be able to choose certain ‘sub-accounts’ that act almost as mutual funds. The performance of the investments that make up these sub accounts will drive the performance of your cash value. Since the stock market can move up or down, so can your cash value.


Equity Index Policies

Equity Indexed policies are like variable policies in that the performance of the cash value depends on the performance of the market. Generally, equity indexed policies have 'floors' and 'ceilings' built in to their performance so that they will never perform worse than a certain percent- but they will also not perform better than a certain percent since their performance is capped at the ceiling.

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