The minimum death benefit that an investor may purchase through a variable-life contract. Exceptions to this minimum, however, may be made for young investors, usually those age 25 or younger. If the company states a minimum face amount, then the investor knows the minimum initial premium will be the amount of money necessary to attain that minimum face amount. Conversely, if the company sets only a minimum initial premium, then the minimum face amount will be the corresponding death benefit that can be guaranteed by the minimum initial premium.
Benefits
Because the typical VL investor is older than 25, the minimum does apply to most VL contract situations. Because of the natural relationship between premiums and face amount, most insurance companies do not set both a minimum initial premium and a minimum face amount.
Origin
This information is taken directly from the insurance contract's prospectus.