Downside of Variable Life Insurance for Estate Planning

What is wrong with variable life insurance for estate planning?

Variable life insurance is a type of permanent life insurance that allows policyholders to invest a portion of their premium payments in various investment options, such as stocks, bonds, and mutual funds. While variable life insurance can have some benefits, it can also have drawbacks when it comes to estate planning.

Potential Problem With Variable Life Insurance In Estate Plans

One potential problem with using variable life insurance for estate planning is that the value of the policy can fluctuate. Because the investment portion of the policy is subject to market conditions, the death benefit of the policy may be higher or lower than the amount originally intended to be passed on to your beneficiaries. This can create uncertainty and make it difficult to plan for the distribution of your assets.

Another issue with variable life insurance for estate planning is that the investment options available under the policy may need to align with your overall investment strategy. Suppose the investment options offered by the insurance company differ from your risk tolerance or financial goals. In that case, you may end up with an unbalanced portfolio that does not serve your estate planning needs.

Additionally, the fees associated with variable life insurance can be higher than other types of life insurance. These fees can eat into the potential returns of the policy and reduce the amount of money available to pass on to your beneficiaries.

Overall, while variable life insurance can be a helpful tool in some cases, there may be better options for estate planning. If you are considering using variable life insurance for estate planning, it's essential to carefully evaluate the potential drawbacks and consider other options that may be more suitable for your needs.


Estate Planning Attorney Free Consultation In Utah

If you need legal help, call this law firm and talk with our experienced attorneys about estate planning for a FREE consultation.

We help you with Estate Planning, Wills, Trusts, Power of Attorney, Health Care Directive, Estate Administration, Probate and More

Parklin Law - Estate Planning

5772 W 8030 S, # N206

West Jordan UT 84081

(801) 618-0699

Parklin Law
Estate Planning Attorney in West Jordan
https://parkin-law.business.site/

40.605070, -112.027530

Disclaimer: This is not legal advice and is simply an answer to a question and that if legal advice is sought to contact a licensed attorney in the appropriate jurisdiction.

Location: Manti, UT 84642, USA

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