Variable life insurance policy owners may make withdrawals in terms of what?

Variable life insurance policies are designed to provide both insurance coverage and an investment component, allowing policyholders to invest their cash value in various accounts or funds. When it comes to making withdrawals from a variable life insurance policy, policyowners typically do so by canceling a certain number of units that represent their investment in the policy.

Each investment option in a variable life policy is divided into units, similar to mutual funds, where the value of each unit fluctuates based on market performance. By canceling units, the policyowner essentially redeems a portion of their investment without the need to specify a fixed dollar amount or percentage of premiums. This mechanism allows for flexibility and control over how much of the investment component the policyowner wishes to withdraw.

Understanding the structure of withdrawals in variable life policies is crucial because it reflects their inherent investment nature, which contrasts with other insurance policies where withdrawals might be capped or structured differently. The other options, while they may pertain to other types of financial products or forms of withdrawal, do not accurately represent the established process within variable life insurance policies.