What is one of the benefits of a variable life insurance policy?

A significant benefit of a variable life insurance policy is the opportunity for policyholders to choose among various investment options for the cash value. This feature allows individuals to allocate their premiums to different investment accounts, which can include stocks, bonds, or mutual funds. As these investments perform, they can lead to potentially higher cash value growth compared to traditional whole life policies, which have fixed growth rates.

This flexibility is especially appealing for those looking to leverage market performance to increase the value of their policy over time. Unlike policies with guaranteed returns or fixed premiums, variable life insurance empowers policyholders to actively participate in their investment strategy, aligning their insurance product with their personal financial goals and risk tolerance.

Other options, such as guaranteed cash value growth or fixed premium payments, are characteristics of more traditional or whole life insurance policies, which do not offer the same level of investment freedom and potential for variable returns. Limited death benefits is not a feature associated with variable life insurance, as these policies typically offer flexible death benefits that can increase based on the cash value and investment performance.