There are a lot of questions that should be asked prior to giving an answer to the question of “When should I get a variable life insurance policy?” There is no one time that each and every person ‘should’ get a variable life policy. Every circumstance, every need, and every person is different and will require different approaches. The only way to determine when the right time to get a variable life policy for you and your family is to have a good understanding of how a variable life policy can benefit your family at the this time of your life. Arming yourself with knowledge will also help you plan for possible future insurance needs or applications. Variable Life in the Younger Years Most young people don’t have the finances to afford a variable life insurance policy. Those that do have the monthly budget to afford one might not have the financial sophistication to use it right or the discipline to keep it in proper order. Those that have the need for life insurance and have the budget and investing savvy will be well served by a variable life insurance policy. The ability to invest the cash value in the underlying subaccounts in a proper fashion consistent with their risk tolerance and basic rules of investing, such as dollar cost averaging, will be in their favor. Variable Life in Mid Life During the middle years it is more common for people to get a variable life policy. This is usually because by this time of life responsibility with finances has begun to a habit and the thought of leaving loved ones behind without adding financial burden begins to be a high concern. If this is the state of life you are in and you have a conservative risk tolerance, a variable life policy is probably the right fit. This is only if you can afford to pay the premium payments for the rest of your life. A variable life policy is meant to be with you until you die so the commitment necessary to keep this policy premiums paid on a regular basis is high. Because a variable life policy has a cash value it is considered a liquid form of cash. As such, it can be used for collateral assignment for some loans, the cash value can be borrowed against and it is possible, but not recommended, to withdraw the cash value. These options make a variable life policy very attractive to those who might need to access the cash value or leverage it for other financial purposes that are only usually feasible during this time of life. Variable Life in Retirement Years A variable life policy can be taken out during the retirement years depending upon the financial status of the individual. If the person has substantial assets and is willing to pay a higher premium, then a variable life policy could be the right choice. However, if the person in question is limited in assets and monthly budget, then a variable life policy might not be the best choice for this time of life.
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The only way to determine when the right time to get a variable life policy for you and your family is to have a good understanding of how a variable life policy can benefit your family at the this time of your life. Arming yourself with knowledge will also help you plan for possible future insurance needs or applications.
Steven Hart specializes in Life Insurance and Annuities, as he is also a licensed agent to sell these products. He has been featured on many life insurance blogs and websites as well as in many articles. To find out more about Life Insurance, check out his popular website!
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