Before you decide whether variable life insurance is a wise investment decision, we urge you to consider the pros and cons. This way, you are guaranteed of making informed financial decisions.
- You have more control over how you want to invest your cash value. You can decide to invest your cash value on bonds, shares, or mutual funds/
- You can use your interest on your sub-accounts to pay for your premium. Let’s say, your premium is $10, 000 per month and you make additional gain of $500 on your cash value. You can use the gain ($500) to reduce the amount of your premium, which would be $9, 500 in this case.
- Your sub-accounts are free from tax, thus helping your sub-accounts to grow faster.
- You pay fixed premium. As a policy holder, you have nothing to worry about inflation.
- You are guaranteed of getting death benefit even if your sub-accounts are performing poorly.
- You can borrow money from your investment component at little or no interest.
- It is very expensive and risky. This is because whether you make or loss or gain on your sub-accounts, you have to pay your premium.
- It depends on your ability to make prudent investment decisions.
- It requires knowledge of investing in stocks, bonds, and mutual funds.