What contributes to the withdrawal value in variable life insurance?

In variable life insurance, the withdrawal value is influenced primarily by the market value of the units allocated to the policyholder's account. This means that the amount a policyholder can withdraw is directly related to the performance of the investments within the variable life insurance policy.

As the underlying investments, such as stocks and bonds, fluctuate in value, so too does the value of the units that have been allocated to the policy. Therefore, the more favorable the performance of these investments, the higher the market value of the units, which consequently increases the withdrawal value available to the policyholder.

This characteristic is unique to variable life insurance, as it allows policyholders to potentially benefit from market gains but also exposes them to the risks of market losses. The withdrawal value is not solely determined by a fixed amount, nor does it rely on guaranteed values, but rather reflects the real-time market conditions affecting the specific investments chosen within the policy.