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“Variable” or “adjustable” life insurance refers to a policy where death benefits and cash values are variable - your death benefits and premiums vary according to your investment's performance. The accumulated cash value is directed to your choice of investment accounts. Investments can include stock funds, bond funds, real estate funds or a combination.

You have more control over how your premiums are invested, but you are also responsible for the performance of the policy. When investing, be sure to get a prospectus from the company and carefully review it. You will have higher death benefits and cash value if the underlying investments do well. Your benefits and cash value will be lower or may be eliminated if the investments you chose don't do as well as you expect.

One needs to be very careful with a variable policy. It can be a great asset to your protection as well as a decent investment. It is interesting to note that variable/adjustable life is so much like "normal" investing that agents offering it must be licensed securities dealers and registered with the U.S. Securities and Exchange Commission.

Advantages.
Allows you to participate in various types of investment options while not being taxed on your earnings. You can apply interest earned on these investments toward the premiums, potentially lowering the amount you pay.

Disadvantages.
The investment risks are yours. When the investment funds perform poorly, less money is available to pay the premiums, meaning that you may have to pay more than you can afford to keep the policy in force. Poor fund performance also means that the cash and/or death benefit may decline, though never below a defined level. You cannot withdraw from the cash value during your lifetime.

Life insurance is an important element is everyone’s life. You should not be walking around without it. But you need proper advice before you buy. When the agent starts explaining, imagine that you are looking for cheap car insurance - it makes it easier to deal with. Get a few different auto insurance quotes to start. You know how to handle the subject of finding cheap car insurance. You start off with auto insurance quotes and move on from there, checking one cheap car insurance policy against the other and calling for more auto insurance quotes as you go along. Soon you have a list of the insurance companies and policy details and you are in a position to decide. Try this same system when you are looking for cheap car insurance.