Variable Universal Life Insurance (VUL)

Each time you pay your premium expenses are taken out and the rest is allocated to the investment options you have selected. This becomes your policy's cash value. Expenses (including the cost of insurance) are deducted from your premiums. What's left (net premiums) can be invested in a variety of funds offered by the insurance company. The performance of your investments is added or subtracted from your policy's cash value on a daily basis. Find out more about how VUL works.

Pros:

• VUL gives you lifelong protection for the people you love, along with premium and death benefit flexibility. It also lets you choose how your net premiums and cash value across investment options made available by the insurance company. This gives you the opportunity to build even more cash value (potentially leading to a higher death benefit) than you could with other permanent life insurance policies.
• Its fees are transparent. You can view the expenses and charges that your policy incurs, along with the performance of your investments on your annual policy statement.
• It can build cash value that will grow tax-deferred and can be used for anything, anytime.¹
• It can be a way to reach other financial goals faster if you're willing to accept market risk.
• VUL might offer a guaranteed death benefit for a certain period of time, regardless of market performance, as long as the required premiums are paid and other conditions satisfied.

Cons:

• VUL might not be right for you if you don't like market risk. Your policy's cash value could fluctuate based on the performance of the underlying investment options you choose. Your policy could lapse if your cash value is ever too low to cover policy costs (unless the death benefit guarantee is active or additional premium payments are made).
• VUL might be appropriate for people who have a long-time horizon before they need to access their policy's cash value.
• VUL might be right for people who are interested in monitoring their policy performance.

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Your death benefit could decrease depending on the type of policy options you've selected when you first get your policy. If you choose a death benefit guarantee, it will ensure your death benefit will stay in-force for the duration of the guarantee as long as premiums are paid. Working with a financial advisor, can you help you build a VUL policy that best fits your needs and goals.

VUL is a life insurance policy and not an investment in and of itself. You choose where your net premiums and cash value are invested across the investment options made available by the insurance company. This allows VUL to potentially grow more cash value over time. However, it does have the potential for the cash value to go down in value as well.

Unlike other products that are taxed annually, VUL lets you build cash value tax deferred. This gives you the opportunity for compound growth since the money you don't pay in taxes can continue to be invested. Keep in mind that the cost of insurance and other policy charges will still need to be paid out of your policy's cash value. Ask an advisor if VUL is right for you. Connect with yours today.

UL and VUL are structured in a similar way—the difference being how your cash value is invested. With UL, its growth is backed by the company's general account. For VUL, you choose where your net premiums and cash value are invested across the investment options made available by the insurance company. The cash value (and possibly death benefit) is determined by how well the investment options perform.

VL is similar to whole life in that it comes with a guaranteed death benefit and set premiums. But the policy's cash value growth and death benefit are not backed by the company's general account. Instead, the policyowner chooses from a variety of investment options. The cash value of a VUL policy grows the same way, but it also gives you flexibility in your premiums and death benefit amount. Want to learn more? Take a look at our guide to life insurance.

VUL could work well for someone who wants the lifelong coverage and the opportunity to grow its cash value faster than they could with a whole life policy. It could also be right for someone who wants to control how their cash value is invested and the option to reallocate cash value over time. VUL might also work well for someone who can take on market risk for the potential to see higher returns that could increase the cash value and death benefit. Want to find out more? Connect with an advisor.

How they're similar:

• Both are types of permanent life insurance.
• Both build cash value.

How they're different:

• Whole life offers guaranteed cash value growth, while the cash value of VUL is dependent on the performance of the investment options a policyowner selects.

• Whole life comes with a guaranteed death benefit, while VUL comes with a flexible death benefit which may not be guaranteed.
• Whole life comes with set premiums, while VUL comes with flexible premiums.

Want to know more? Check out our guide to life insurance.

Indexed Universal Life (IUL) and Variable Universal Life (VUL) insurance are both types of permanent life insurance that offer a death benefit and cash value. However, they differ in how the cash value is invested and the level of risk involved.

The cash value of IUL is not invested in the markets. Instead, it mimics market performance by using a market index, such as the S&P 500.⁶ Its main advantage is limited downside risk due to a floor on returns, meaning you may not lose as much money in a downturn if the market goes lower than the floor. But many IULs have a cap rates on returns, so you might not get the most from strong market performance.

VUL, on the other hand, lets you invest its cash value in various investment options, similar to mutual funds. This can give you a greater chance for higher returns, but it's also riskier. There's the possibility that you could lose your principal due to market fluctuations. VUL is more suitable for those with a higher risk tolerance and a desire for potentially greater growth.

Ask an advisor which might be a better fit for your goals and risk tolerance Connect with one now.

This policy can help you leave a meaningful legacy to the next generation. It covers the lives of two people and provides an income tax-free death benefit payable after both insureds pass.⁵ SVULP gives you access to growth opportunities linked to market performance. You'll have the ability to tailor your plan to fit your lives and changing needs. So this policy might be a good choice if you're interested in building a tax-efficient legacy, estate liquidity, charitable giving, supporting a loved one with special needs, or protecting your business. Plus, a couple can typically buy a survivorship policy for less than the cost of two individual permanent policies.⁷ Ask an advisor if SVULP is right for you. Connect with yours today.

There are 59 investment options to choose from with a NM Select Variable Universal Life policy. Each investment option has its own focus, goals, and advisor(s). You'll have the option to select individual investment options, or you can choose from a variety of pre-packaged solutions. Each is designed to work with a particular asset allocation model. The pre-packaged solutions can make it easier to choose investments for you. They have a mix of different assets that could be good for your risk tolerance and financial goals.

We also offer access to our Strength and Stability (SAS) account, which can reduce the amount of risk you take on. This unique feature gives you a fixed account option backed by our general account investment portfolio. This will help you reduce the risk to your VUL policy over time. You'll generally have the option to transfer 5-50 percent of your net premiums and cash value (depending on how long you've owned your policy) to the SAS account, while the rest remains investment options you select. You might want to take advantage of the upside potential of investing more aggressively in the early years of your policy. Then, you can minimize your risk over time or as things change later on in your life. Want to find out more? Connect with an advisor.