Which of the following about single premium variable life policies is TRUE?

Single premium variable life policies are designed to offer policyholders a significant degree of flexibility in managing the coverage and investment component of their insurance. By allowing policyholders to vary the cover level, these policies can be tailored to fit individual financial goals and circumstances. This flexibility is one of the primary features that distinguishes variable life insurance from other types of life insurance policies.

In such policies, after making an initial single premium payment, policyholders can adjust their death benefit amounts, which can be increased or decreased depending on their needs and preferences. Additionally, as the investments within the variable life policy perform, the cash value and death benefit can fluctuate, offering further customization based on the policyholder's investment strategy.

In contrast, policies that have a fixed term duration do not provide this level of flexibility, as they are bound by set periods of coverage rather than allowing variations in protection levels. Similarly, restrictions on additional premiums (top-ups) imply limited options for policyholders to increase their investment or coverage. Lastly, classifying these policies as term life insurance is inaccurate, as term life insurance does not include a cash value component or investment opportunities, which are fundamental characteristics of variable life policies.