1. Variable life insurance plans have greater flexibility to change the mortality and savings proportions and transparency.

2. Variable life insurance plan combines investment and insurance like Ulips. However, the returns are declared by the insurance companies on an yearly basis and are not linked to the stock market.

3. One part of the premium goes to buy life insurance, and another is invested in bonds or equities.

4. The death benefit and savings element can be reviewed and altered as the policyholder’s circumstances change. As per the guidelines of IRDAI, the premium amount cannot be altered during the policy.

5. There are two types of VLIP— participating which offers guaranteed returns and non-participating, which offers yearly bonus at the end of each financial year in addition to guaranteed returns.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)