What is a feature of variable life insurance policies?

Variable life insurance policies are unique in that their death benefits are not fixed but can fluctuate based on the investment performance of the policyholder's selected investment options. This means that if the underlying investments perform well, the death benefit may increase. Conversely, if the investments underperform, the death benefit may decrease as well. This characteristic of variability allows policyholders to potentially benefit from market upswings while also exposing them to risk if the market declines.

Unlike whole life policies where the cash value is typically guaranteed to grow at a predetermined rate, or term policies where death benefits are fixed, variable life insurance provides more flexibility and investment opportunity, albeit with inherent risks. This dynamic nature is a fundamental aspect of variable life insurance policies, distinguishing them from other types of life insurance that offer more stable and predictable benefits.