Which type of life insurance allows for investment in various funds while also providing a death benefit?

Variable life insurance is a unique type of permanent life insurance that combines a death benefit with an investment component. Policyholders have the opportunity to allocate their premiums among a variety of investment options, such as mutual funds. This means that the cash value of the policy can grow based on the performance of the chosen investments, which can result in potentially higher returns compared to traditional whole life insurance. Additionally, the death benefit may vary depending on the performance of these investments, providing flexibility and the potential for increased financial growth.

Whole life insurance offers a fixed death benefit and guaranteed cash value growth but does not permit investment in varying funds. Term life insurance provides coverage for a specific period without a cash value component and does not involve investments. Universal life insurance offers flexible premiums and an adjustable death benefit but has more conservative investment choices compared to variable life insurance. This is why variable life insurance is specifically designed to allow for investments while providing a death benefit.