1Generally the death benefit is income-tax free. For Income Protection Life a portion of the death benefit is taxable to the beneficiary.
All guarantees are based on the continued claims paying ability of the issuing company and on variable insurance do not apply to the performance of the variable subaccounts, which will vary with market conditions.
Accessing policy cash value through loans and surrenders may cause a permanent reduction of policy cash values and death benefit and negate any guarantees against lapse. Surrender charges may apply to the policy and loans may be subject to interest charges. Although loans are generally not taxable, there may be tax consequences if the policy lapses, or is surrendered or exchanged with an outstanding loan. Taxable income could exceed the amount of proceeds actually available. Surrenders are generally taxable to the extent they exceed the remaining investment in the policy. If the policy is a modified endowment contract (MEC), pre-death distributions, including loans from the policy, are taxed on an income-first basis, and there may be a 10% federal income tax penalty for distributions of earnings prior to age 59½.
Before you purchase, be sure to ask your financial advisor about the life insurance policy's features, benefits, risks and fees, and whether the life insurance is appropriate for you, based upon your financial situation and objectives. Variable life insurance is a complex investment vehicle that is subject to market risk, including the potential loss of principal invested.