How a VUL policy works over time
From your first premium to the death benefit, here is the path your money takes inside a variable universal life policy.
The life of a premium
You pay a premium
You choose an amount within the policy’s minimum and maximum limits, monthly, annually or on another schedule.
Charges are deducted
Premium charges, the cost of insurance, and administrative fees are deducted. These pay for the protection and the policy’s operation.
The rest is invested
The remaining amount is allocated to the subaccounts you selected. Each subaccount has its own objective, risk level and expenses.
Cash value moves with the markets
Subaccount performance raises or lowers your cash value. Monthly charges continue to be deducted from it.
You can access cash value
Policy loans or partial withdrawals can provide funds. Both reduce cash value and the death benefit, and outstanding loans accrue interest.
Beneficiaries receive the death benefit
When the insured passes away, the death benefit, minus any outstanding loans, is paid to the beneficiaries, generally income-tax-free.
Keep an eye on funding
If cash value falls too low to cover monthly charges, the policy can lapse unless you add premium. An annual policy review helps you stay on track.
Markist Athelus, FSCP®
Financial Services Agent (FSA) · Farmers Financial Solutions, LLC
Annual reviews are part of how Markist supports policyholders.
Death benefit option and allocation
Level death benefit
The death benefit stays the same. As cash value grows, the cost of insurance may fall because the insurer’s net amount at risk decreases.
Increasing death benefit
The death benefit equals the face amount plus cash value. Beneficiaries may receive more, but insurance costs are typically higher.
Your allocation
A more aggressive allocation may grow faster but can fall further. Many people rebalance periodically to stay near their target mix.
See it with your own numbers
A personalized illustration shows how premiums, charges and hypothetical returns could interact for you.