What is a significant attribute of variable life insurance?

The significant attribute of variable life insurance lies in its value being primarily determined by investment performance. Unlike traditional life insurance policies where the cash value grows at a fixed rate, variable life insurance allows policyholders to allocate their cash value among a variety of investment options, typically including stocks, bonds, and mutual funds. The returns on these investments directly impact the cash value and potentially the death benefit of the policy. This characteristic provides the opportunity for higher returns compared to fixed policies, but it also comes with greater risk, as the value may decrease if the selected investments perform poorly.

The other options do not align with the fundamental nature of variable life insurance. For instance, while some may suggest variable life policies have lower commission rates than traditional policies, this can vary based on the specific policies and the insurers involved. The claim about guaranteed benefits regardless of market conditions directly contradicts the variable nature of such policies, as the values fluctuate based on market performance. Lastly, the assertion that variable life insurance cannot be combined with other investment products is misleading; it is designed to be a standalone product but can often complement other investment strategies within a broader financial plan.