Series 26: Variable Life: Subaccounts And Death Benefit

Variable Life: Subaccounts and Death Benefit

As with variable annuities, variable life insurance products are deemed to be investment companies whose insurance premiums must be invested in accounts that are separate from their other income and expenses. The separate accounts allow investors to select from a variety of investment choices, known as subaccounts. Their cash value is not guaranteed by the insurance company but is based solely on the performance of the subaccounts. This means that if, for instance, the subaccounts increase by 5%, the cash value will increase by 5%. Similarly, if the subaccounts decrease by 5%, the cash value will decrease by 5%.

The insurance company does prov