Capital Appreciation

Dividends

Interest

Capital Gains

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Variable Life Insurance

A Variable Plan is a Life Insurance contract with an investment component attached to it. Variable Plans are
acknowledged as a medium to long-term investment vehicle, which makes them an excellent tool to accumulate a
fund for children’s education, retirement fund or any other large expense in the future. The returns on the
investment component of the said plan (Account Value) at any time vary according to the performance of the fund
chosen by the policyholder.

Account Value
Pertains to the value of the variable life policy based on the performance of the variable fund at the time of
valuation.

Variable Life Fund

Fund to which an investment-linked life insurance policy is linked. Also known as unit-linked fund or unitized fund.

Unit Pricing
The value of the underlying assets at the separate account(s) divided by the number of units issued.

Forward Pricing
Pricing structure wherein the buying and selling prices of units are determined at the next valuation date.

Top Ups
Refers to additional premium injections which can be used to additional units.

Premium Holiday
Refers to the cessation of premium payments on a variable life insurance contract for a period, with a view to
continue it later on.

Minimum Death Benefit

The amount of the guaranteed death benefit, other than incidental insurance benefits, payable under variable
life/ILP contract regardless on the investment performance of the separate accounts.

Net Amount at Risk

Any excess of minimum death benefit over the value of the policyholders separate variable account.

Increasing Death Benefit

The proceeds are equal to the sum assured plus account value.

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Level Death Benefit
The proceeds are equal to the higher of the sum assured and the account value.

TWO MAJOR CHARACTERISTICS OF VARIABLE LIFE INSURANCE

1. Charges deducted from premiums are clearly disclosed to the policyholders.
2. The premium difference, after charges are deducted, goes to a separate fund.

TRADITIONAL LIFE vs. VARIABLE LIFE

Death Benefit

1. Increasing Death Benefit

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 2. Level Death Benefit

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