variable universal life insurance

“We begin our discussion by noting that the characteristic of variable life insurance  (VL) or variable universal life insurance (VUL) that distinguishes it from whole life or universal life is the presence of a separate account within the policy of insurance. This separate account contains investment choices, usually mutual funds, into which the owner of the policy may invest. When a premium is paid into a VUL policy, the insurance company deducts the cost of insurance and certain fees, and the remainder is invested in the funds in the separate account chosen by the owner of the policy. The ramifications of this arrangement are significant in the context of the equitable distribution of a marital estate. Because the separate account of a VUL policy is, in essence, no different than a brokerage account, the considerations involved in attempting to establish the value of the marital portion of the policy are not the same as the considerations relevant to the determination of the cash value of other types of cash value policies, such as whole life. Instead, the value of the separate account of a VUL policy must be derived in the same manner as one would determine the value of securities held in a brokerage account.”