YOU ASK:

What is the definition of Variable Premium Life Insurance Policy?

WE ANSWER:

A Variable Premium Life Insurance Policy is a nonparticipating whole life policy where the premiums vary from time to time. The policy states two premium rates - a maximum premium rate, as well as a lower rate.

At the start of the policy, the rates charged are the lower premium rate. This rate is guaranteed for a minimum time period. Then, the premium rates can change, based on the actual interest, loss experience and mortality cost. The new rates may either be lower or higher than the premium rate.

The premiums may change from time to time, depending on the said factors, but the premium rates will never be higher than the maximum premium rate that is declared in the policy.

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