Securities

What Does Securities Mean?

Securities are financial instruments representing units of debt or ownership that can be traded, typically in the form of stocks, bonds, or options.

Many life insurance companies include investment components involving securities to help increase the cash value of the policies they offer. That structure is mainly found in permanent life insurance, since term coverage does not build cash value.

Insuranceopedia Explains Securities

Many securities are traded on public markets like the New York Stock Exchange. Publicly traded companies raise capital by selling stocks on these markets, which investors can then buy and sell. However, the value of these securities can fluctuate significantly, introducing a level of risk when investing in them through life insurance policies. How directly that risk reaches the policyholder depends on the product. Universal life insurance usually credits interest at a rate set by the insurer, while indexed universal life ties cash value growth to a market index and typically caps both gains and losses.