Variable Life Insurance Policy

See: Life Insurance. See: Variable Death Benefit.

A variable life insurance policy "varies" in regard to the manner in which the money behind it is invested. That is...an individual puts in $100 a month every month from the time they're 23. By the time they're 87 and ready to backstroke 6 feet under, they will have invested over 700 payments of that hundred bucks.

Well, what did the insurance company do with it over that half century? If they just kept it as a pile of twenties under the mattress, it's worth...eh, 70 grand? 80 grand? Not all that much to retire on. If they invested it in index funds like ticker: SPY, it's probably worth millions.

The point is that, in a variable policy, everything varies based on the investing results. The policy writer (insurance company) essentially splits the investment risk with the policy holder. But eventually...both die.