Variable Death Benefit
Categories: Insurance
Oh, life insurance, the one thing that everyone loves to hate and is always confused about. Life insurance is insurance on your life, which means the payout happens when you die. Just like how health insurance pays out when your health declines (well, in theory anyway—read dat fine print). Unsurprisingly, having life insurance both protects your family if you’re the breadwinner and increases the economic incentive for your family to kill you, though that’s arguably hard to get away with.
The variable death benefit refers to the life insurance payout for a variable universal life insurance policy (universal life insurance = the expensive kind of life insurance, i.e. the ones filthy rich people get). Universal life insurance includes an investment component, which will vary depending on the market. The death benefit, or payout you get, varies depending on this investment component.
You might be thinking, “well that doesn’t sound very ‘universal’,” and you would be right, except universal life insurance also includes the guaranteed death benefit, which is a fixed, constant amount. The guaranteed death benefit is the only payout included in normie life insurance.