VARIABLE UNIVERSAL LIFE INSURANCE (VUL)
Protection on your terms.
Variable Universal Life (VUL) lets you protect the people you love with customized coverage and gives you control over how your cash value is invested.
What is variable universal life insurance (VUL)?
Variable universal life gives you the protection of a generally tax-free death benefit along with the flexibility to customize your policy as your life and needs change. If you’re interested in growing your wealth, VUL might be a smart move. That’s because it gives you the opportunity to build even more cash value than you could with other types of permanent life insurance, potentially leading to a higher death benefit. However, it’s important to know that since your policy’s cash value is invested in the market, it can go up or down in value based on market volatility.
The benefits of variable universal life policies
Cash value
VUL builds cash value over time that grows, tax deferred, that you can use for anything, anytime.1 Your policy also has the potential to build even more cash value than you could with traditional permanent life insurance.
Flexible premiums & death benefit
With VUL, you'll have the flexibility to choose the amount of your death benefit, how much you pay in premiums, and when you pay them. As long as there is enough cash value to pay your policy's monthly fees and expenses, your coverage will generally continue.
Flexible investments
VUL also gives you flexibility in how your cash value is invested, allowing you to choose from multiple policy investment options managed by leading investment firms.
Option to de-risk over time
Our Strength and Stability account (SAS)2 lets you move some money out of the market permanently if you want to take on less risk over time. Plus, you'll get a crediting rate that's backed by the Northwestern Mutual general account.3
Automatic rebalancing
VUL also comes with the option to use automatic rebalancing, giving you periodic, automatic adjustments that can help keep your diversified investment plan on track.
Dollar cost averaging
With this feature, money is moved from a money market account to your investment accounts at regular intervals. That way, you generally purchase more investments when the market is down and fewer when it's up.4
How much do you know about life insurance?
Questions about variable universal life insurance? We've got answers.
Each time you pay your premium, expenses are taken out and the remainder goes into your policy’s cash value. Monthly expenses (including the cost of insurance) are deducted. Then your policy’s cash value can be invested in a variety of ways. The performance of your investments is added or subtracted from your policy’s cash value on a daily basis. Find out more about how VUL works.
VUL gives you lifelong protection for the people you love, along with premium and death benefit flexibility. It also lets you choose how your cash value is invested, so you could have the opportunity to build even more cash value (potentially leading to a higher death benefit) than you could with other permanent life insurance policies.
Its fees are transparent. You can view the expenses and charges that your policy incurs, along with the performance of your investments on your annual policy statement.
It can build cash value that will grow tax deferred and can be used for anything, anytime.1
It can be a way to reach other financial goals faster if you’re willing to accept market risk.
VUL offers a guaranteed death benefit for a certain period of time regardless of market performance as long as the required premiums are paid.
Cons:
VUL might not be right for you if you’re uncomfortable with market risk since your policy’s cash value could fluctuate based on the performance of the underlying investment options you choose. It’s also possible that your policy could lapse if your cash value is ever too low to cover policy costs (unless additional premium payments are made).
VUL is appropriate for people who have a long time horizon before they’ll need to access their policy’s cash value.
VUL appropriate for people who are interested in monitoring their policy performance.
Want to find out more? Connect with an advisor.
When you first get your policy, you can decide how long you want your death benefit to be guaranteed. As long as you continue to pay the premiums required for your death benefit guarantee, your policy will remain in force and the death benefit won’t be subject to market ups and downs. Want to find out more? Connect with an advisor.
Since you have a wide variety of options for how your cash value is invested, your VUL policy has the potential to build even more cash value than it could with whole life insurance. On the other hand, it does have the potential to go down in value as well, since your cash value, and possibly your death benefit, are tied to the performance of those investments. So VUL could be right for you if you are comfortable with higher risk and have a long time horizon for the chance to see higher returns.
Unlike products that are taxed annually, VUL lets you build cash value tax deferred, giving you the opportunity for compound growth since the money you don’t pay in taxes can continue to be invested. Keep in mind that the cost of insurance will still need to be paid out of your policy’s cash value. Want to find out more? Connect with an advisor.
Make a plan for tomorrow today.
When you work with Northwestern Mutual, we listen to the goals you have and design a financial plan tailored specifically to your life. Universal life insurance is a flexible tool that could be an important part of your plan, giving you lifelong protection while helping you meet more of your financial goals. Find out more about how we plan.
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1 Your policy’s cash value typically becomes a useful source of funds only after you have built up your cash value. Cash value is depending on the time and amount of the premiums paid and market performance. Each method of utilizing your policy’s cash value has advantages and disadvantages and is subject to different tax consequences. Withdrawals from and loans against a policy will reduce the policy’s cash surrender value and death benefit. As a general rule, withdrawals are taxable to the extent they exceed the cost basis of the policy, while loans are not taxable when taken. Loans taken against a life insurance policy can have adverse effects if not managed properly. Policy loans, including any accrued interest, must be repaid in cash or from policy values upon policy termination or the death of the insured. Repayment of loans from policy values (other than death proceeds) can potentially trigger a significant tax liability, and there may be little or no cash value remaining in the policy to pay the tax. If loans equal or exceed the cash value, the policy will terminate if additional cash payments are not made. Policyowners should consult with their tax advisors about the potential impact of any withdrawals or loans.
2 The principal and interest credited to amounts in the SAS Account are guaranteed by the Company and are subject to the claims-paying ability of the Company. There are restrictions on the timing and amounts that can be allocated or transferred to the SAS Account. Amounts in the SAS Account may not be transferred from the SAS Account to the Divisions. You should carefully consider whether the SAS Account is suitable for you in light of your investment objectives and liquidity needs. Review the Variable Universal Life Plus (VULP) Prospectus for full details and limitations of the SAS account. Consult your Financial Representative with any questions.
3 Policyowners are not investing in the general account portfolio when purchasing universal life insurance. They’re buying products backed by the financial strength of Northwestern Mutual. The policy guarantees are backed by the financial strength and the claims paying ability of Northwestern Mutual.
4 It’s important to remember that all investments carry some level of risk, including the potential loss of principal invested. Dollar Cost Averaging is an investment strategy; no investment strategy can guarantee a profit or protect against a loss.
5 Third-party ratings are a measure of a company’s relative financial strength and security but are no reflection on the safety or performance of the variable funds. Third-party ratings are subject to change. A.M. Best Company, [A++ (highest), May 2021]; Fitch Ratings, [AAA (highest), July 2021]; Moody’s Investors Service, [Aaa (highest), July 2021]; S&P Global Ratings, [AA+ (second highest), July 2021]. Ratings are for The Northwestern Mutual Life Insurance Company and Northwestern Long Term Care Insurance Company.
6 Loyalty is based on Northwestern Mutual client data.
7 ©2017–2022 and TM, NerdWallet, Inc. All Rights Reserved.
Variable contracts have limitations. You should carefully consider the investment objectives, risks, expenses and charges of the investment company before you invest. A registered representative can provide you with a policy prospectus as well as prospectuses for the funds that will contain the information noted above and other important information that you should read carefully before you invest or send money.
Cash values are not guaranteed with variable life.
State variations may apply. All products may not be available in all states.
Principal Underwriter: Northwestern Mutual Investment Services, LLC (NMIS) (securities), subsidiary of NM, registered investment adviser, broker-dealer, member FINRA and SIPC.
To be used with form numbers UU.VULP.(1019), UU.EVUL.(1019), UU.VULP.APB.(1019), UU.EVUL.SOPE.(1019) or state equivalent. Not all contracts and optional benefits are available in all states.
90-2758 (0322)
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company and its subsidiaries. Life and disability insurance, annuities, and life insurance with long-term care benefits are issued by The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM). Long-term care insurance is issued by Northwestern Long Term Care Insurance Company, Milwaukee, WI, (NLTC) a subsidiary of NM. Investment brokerage services are offered through Northwestern Mutual Investment Services, LLC (NMIS) a subsidiary of NM, broker-dealer, registered investment advisor, and member FINRA and SIPC. Investment advisory and trust services are offered through
Northwestern Mutual Wealth Management Company® (NMWMC), Milwaukee, WI, a subsidiary of NM and a federal savings bank. Products and services referenced are offered and sold only by appropriately appointed and licensed entities and financial advisors and professionals. Not all products and services are available in all states. Not all Northwestern Mutual representatives are advisors. Only those representatives with “Advisor” in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.