Life Insurance
Variable Universal Life (VUL)
Variable universal life insurance combines the premium flexibility of universal life with investment sub-accounts similar to mutual funds, allowing cash value to grow—or shrink—based on market performance.
Last reviewed: May 2026 · Editorial methodology
Definition
Variable universal life (VUL) insurance is a form of permanent coverage regulated as both an insurance product and a security, requiring agents to hold a FINRA Series 6 or Series 7 license to sell it. The policyholder allocates cash value among a menu of sub-accounts—equities, bonds, money market funds—with no guaranteed minimum interest rate, meaning the cash value can decrease substantially in a bear market. Death benefits can be structured as a fixed amount (Option A) or as the face value plus the account value (Option B), with Option B producing higher internal costs. A 35-year-old professional might fund a $1 million VUL policy with $1,500 per month over 20 years, hoping equity sub-account growth reduces or eliminates premiums in retirement. If markets perform poorly, the policyholder may need to inject additional premiums to prevent lapse, a risk that must be disclosed clearly at sale. VUL policies are most appropriate for high-income earners who have already maxed out qualified retirement accounts and can tolerate investment risk inside a life insurance wrapper.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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