Last Updated on: December 13th, 2025
Reviewed by Kyle Wilson
Variable life insurance is a type of permanent life insurance that combines lifelong coverage with an investment component. It offers flexibility and growth potential but also carries market risk. Understanding how it works, and how it compares to universal and whole life insurance—is essential before choosing a policy.
In this guide, we’ll explain what variable life insurance is, how variable universal life insurance works, the pros and cons, and the differences between variable, universal, and whole life insurance.
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Variable life insurance is a permanent life insurance policy that provides a death benefit along with an investment feature. A portion of your premium is invested in subaccounts, similar to mutual funds, which can grow or decline based on market performance.
Unlike term insurance, variable life insurance offers lifetime coverage as long as premiums are paid.
The variable life insurance definition refers to a policy where the cash value and sometimes the death benefit fluctuate depending on the performance of selected investments. Policyholders assume investment risk but also gain the opportunity for higher returns.
To define variable life insurance simply, it is life insurance that lets you invest part of your premium in market-based funds. The value of the policy can increase or decrease over time.
Variable universal life insurance (VUL) combines features of both variable life and universal life insurance. It offers investment flexibility along with adjustable premiums and death benefits.
A variable universal life insurance policy allows policyholders to change premium amounts while investing cash value in market-linked subaccounts.
The variable universal life insurance definition describes a permanent policy with flexible premiums, adjustable death benefits, and investment-based cash value growth.
Universal variable life insurance is another term often used for variable universal life insurance. It highlights the combination of universal life’s flexibility and variable life’s investment potential.
Flexible premium variable life insurance allows policyholders to adjust premium payments over time. This flexibility can help during financial changes, but sufficient funding is required to keep the policy active.
The biggest disadvantage of variable life insurance is market risk. Poor investment performance can reduce cash value and potentially impact the policy if not adequately funded.
Yes, you can withdraw money from variable life insurance through loans or partial withdrawals. However, withdrawals may reduce the death benefit and could have tax consequences if not managed carefully.
When comparing variable life insurance vs whole life, the key difference is investment risk. Whole life insurance offers guaranteed premiums and cash value, while variable life allows market-based growth with higher risk.
Variable whole life insurance is sometimes used to describe variable life insurance policies that maintain fixed premiums but variable cash value growth. Unlike traditional life, returns are not guaranteed.
The difference between universal and variable life insurance lies in cash value growth. Universal life typically earns interest at a declared rate, while variable life invests in market-based funds.
When comparing universal life insurance vs variable life insurance:
Variable universal life insurance vs whole life comes down to flexibility versus stability. Whole life provides guarantees, while VUL offers premium flexibility and investment options.
Comparing universal life vs variable life insurance helps buyers understand their risk tolerance. Variable life suits those comfortable with investments, while universal life appeals to those seeking moderate growth with less volatility.
The difference between fixed and variable life insurance is predictability. Fixed policies offer guaranteed returns, while variable policies fluctuate based on investment performance.
The difference between universal and variable life insurance is how cash value grows. Universal life earns interest, while variable life grows through investment performance.
Variable life insurance may be suitable for individuals who:
Variable life insurance offers flexibility and growth potential but comes with investment risk. Whether choosing variable whole life, variable universal life insurance, or comparing universal vs variable life insurance, understanding the differences helps you make informed decisions.
Choosing the right policy depends on your financial goals, risk tolerance, and long-term planning needs.At Burial Senior Insurance, we help you understand your life insurance options with clarity and care.
Speak with our experts today and secure peace of mind for your loved ones.
Variable life insurance is a permanent policy that combines life coverage with investment-based cash value growth.
Universal life earns interest on cash value, while variable life invests cash value in market-based options.
The main disadvantage is exposure to market risk, which can reduce cash value.
Yes, but withdrawals may reduce benefits and create tax implications.
Fixed life insurance offers guaranteed growth, while variable life insurance fluctuates with investments.
Senior Writer & Licensed Life Insurance Agent
Iqra is a dynamic and insightful senior writer with a passion for life insurance and financial planning. With over 8 years of hands-on experience in the insurance industry, Iqra has earned a reputation for delivering clear, actionable advice that empowers individuals to make informed decisions about their financial future. At Burial Senior Insurance, she not only excels as a licensed insurance agent but also as a trusted guide who has successfully advised over +1500 clients, helping them navigate the often complex world of life insurance and annuities. Her articles have been featured in top-tier financial publications, making her a respected voice in the industry.
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