Page 142 - The Informed Fed--Hearn Wealth Management

not need to be repaid, but interest may be charged to your cash value
account. Premiums are adjustable by the policy owner.

Variable investment: A variable investment is any investment whose
value, and therefore returns, fluctuates with market conditions such as a

common stock, a plot of raw land, and a hard asset.

Variable Rate Mortgage (VRM): A variable rate mortgage offers an
initial interest rate that is usually lower than a fixed rate, but that adjusts
periodically according to market conditions and financial indices. The

rate may go up and/or down, depending on economic conditions. To

Variable Universal Life Insurance: A variable life insurance policy
provides both a death benefit and an investment component called a

cash value. The owner of the policy invests the cash value in sub
accounts selected by the insurer. The policyholder may accumulate

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without paying taxes on the borrowed gains (taxes may be required if
policy is surrendered). As long as the policy stays in force, the borrowed

funds do not need to be repaid, but interest may be charged to your cash
value account.

Vesting: Vesting entitles you to the contributions your employer has
made to a pension or retirement savings plan for you, including matching
contributions to salary reduction plans. You become vested when you

have been employed at that job for at least the minimum period the plan
requires. Those limits are established by federal law.

Viatical settlement: Occurs when a person with terminal or chronic
illness sells his/her life insurance policy to a third party for an amount

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