Question 1

What is a variable survivorship life insurance policy?

Accepted Answer

A variable survivorship life insurance policy is a type of life insurance policy that covers two individuals and pays out a death benefit upon the death of the second insured person. Unlike traditional life insurance policies, variable survivorship policies allow policyholders to invest their premiums into various investment options, such as stocks, bonds, and mutual funds, which can potentially increase the cash value of the policy.

Question 2

How does a variable survivorship life insurance policy work?

Accepted Answer

A variable survivorship life insurance policy works by combining the lives of two insured individuals and providing a death benefit to the policy&#8217;s beneficiaries after the death of the second insured person. The premiums paid into the policy are allocated to different investment options chosen by the policyholders. The cash value of the policy fluctuates based on the performance of these investments. Policyholders have the flexibility to adjust their investment allocations over time.

Question 3

What factors affect the cost of a variable survivorship life insurance policy?

Accepted Answer

The cost of a variable survivorship life insurance policy can be influenced by several factors, including the age and health of the insured individuals, the desired death benefit amount, the length of the policy&#8217;s coverage, and the chosen investment options. Additionally, the fees and charges associated with the policy, such as administrative fees and investment management fees, can also impact the overall cost.

Question 4

Are variable survivorship life insurance policies more expensive than traditional life insurance policies?

Accepted Answer

Variable survivorship life insurance policies tend to be more expensive than traditional life insurance policies. This is because variable policies offer the additional feature of investment options, which can introduce higher administrative and management fees. Moreover, the cost can vary based on the performance of the chosen investments, which may not always guarantee positive returns. It is important to carefully consider the potential risks and costs associated with variable survivorship policies before making a decision.

Question 5

Can the investment options in a variable survivorship life insurance policy be changed?

Accepted Answer

Yes, the investment options in a variable survivorship life insurance policy can typically be changed. Policyholders have the ability to adjust their investment allocations based on their risk tolerance, investment goals, and market conditions. However, there may be certain restrictions or limitations on how frequently changes can be made, as well as potential fees associated with switching investment options. It is advisable to consult with the insurance provider or financial advisor for specific details regarding investment changes.

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