Variable Life Insurance
This insurance policy, a form of whole life insurance, combines an actual life insurance policy together with a tax deferred investment account. It also allows you tax-free access to whatever the cash value of the policy is. Recently, insurance companies have been advertising variable life insurance as a good college savings vehicle since the cash value of the policy is not factored in any of the financial aid need formulas.Variable life insurance has a lot of investment risks because a portion of your premium dollars in your policy is invested in bond funds, money market funds, stocks or other investments. As a result, the actual value of the policy will vary depending on the performance of these investments.
If your investments don't perform too well, there will be less money available to pay the premiums, which means that you might end up paying more than you can to keep the policy going. Keep in mind that you can't take out any money from your cash value while you are alive.
