What Is Ameritas Variable Life Insurance?
Ameritas variable life insurance is a type of permanent life insurance that combines a death benefit with an investment component. Premiums are divided between a core life‑coverage component and separate sub‑accounts that investors can choose from, such as equity, bond, or balanced funds.
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Key Features and Benefits
- Flexible Premiums – Policyholders can adjust premium payments within limits, allowing for cash‑flow flexibility.
- Investment Control – Direct access to a range of mutual‑fund–style sub‑accounts lets you tailor risk and return to your goals.
- Tax Advantages – Premiums are paid with after‑tax dollars, but the cash value grows tax‑deferred, and withdrawals (up to the cost basis) are tax‑free.
- Death Benefit Options – Choose between a level death benefit or an increasing benefit that rises with the policy's cash value.
How the Investment Component Works
Each sub‑account is managed like a mutual fund. Policyholders can allocate a portion of the premium to each account, and the value of those accounts is added to the policy's cash value. The insurer does not guarantee a minimum return, so performance depends on market conditions.
Cost Considerations
Costs include the mortality and expense charge, administrative fees, and the cost of the chosen sub‑accounts. Because the policy is variable, the overall cost can rise if you shift to higher‑risk funds that carry higher management fees.
Who Should Consider Ameritas Variable Life?
Investors with a long‑term horizon who want a life‑insurance vehicle that can also serve as an investment tool. Ideal for those who are comfortable monitoring market performance and adjusting allocations as needed.
Risks and Limitations
Market volatility can erode cash value, potentially reducing the death benefit if the policy's minimum guaranteed amount is not maintained. Policyholders must also be prepared to meet premium obligations to avoid lapsation.
How to Get Started
Contact an Ameritas licensed agent to discuss available sub‑accounts, projected cash‑value growth, and how the policy fits into your estate or retirement planning strategy. A qualified adviser can help you balance risk and reward while keeping the policy's cost structure transparent.