Variable Appreciable Life Insurance Policy

Of the many types of life insurance, a variable appreciable life insurance policy offers the policy owner a choice of investment options inside the policy. The cash values can be directed to mutual fund sub-accounts, bonds or money market accounts to potentially increase the long-term value of the life insurance cash values and death benefit.

The Death Benefit

A variable appreciable life insurance policy is a type of whole life insurance. As such, the death benefit is structured similarly to a traditional whole life insurance policy. However, the death benefit can fluctuate because of the underlying investments of the variable policy. Some policies offer a minimum guaranteed death benefit, but many policies offer no guarantees at all.

Cash Value

Cash values in a variable life insurance policy are seldom guaranteed at a minimum level. The cash values are invested into bonds, mutual funds or money market accounts to try to increase the value of the cash value. However, the cash value could decline to zero if the underlying investments do poorly enough.


The benefits of a variable policy are simple: if your investments do well, you could end up with sizable cash values and a large death benefit. These policies have the most upside potential of any whole life policy due to the variable nature of the policy.


A common misconception about variable life insurance is that it is a type of universal life insurance. Variable life and variable universal life insurance are technically two different kinds of life insurance. While the investment component of the policy is similar, the way the policy is designed is slightly different. Universal life unbundles the cost of insurance from the cash values, separating the two. The death benefit is based on an annual renewable term policy while the variable life insurance policy keeps these costs bundled and is based on the whole life chassis.


Before buying a variable appreciable life insurance policy consider that variable policies typically do not guarantee anything, unlike traditional whole life insurance. The policy's cash values and death benefit are always at risk due to the variable nature of the underlying investments. While this offers incredible potential, it also comes with the greatest potential for loss.