Which of the following components typically influences the returns of variable life insurance?

The returns of variable life insurance are primarily influenced by the performance of the investment options selected by the policyholder. This type of insurance policy allows policyholders to allocate the cash value among several investment options, such as stocks, bonds, or mutual funds. The returns can vary significantly based on how well these underlying investments perform in the market.

Since the policyholder chooses these investment options, they have direct control over potential growth. If the selected investments do well, the cash value, as well as the death benefit, can increase accordingly. Conversely, poor performance in the chosen investments could lead to lower returns, reflecting the inherent risk associated with variable life insurance policies.

Other components, such as guaranteed interest rates, administrative fees, or the age of the insured, do not have a direct impact on the investment returns themselves. While these factors are relevant to the overall policy performance, they do not determine the variability of the returns in the same way that the selected investment options do. Thus, focusing on investment performance is crucial for understanding the dynamics of returns in variable life insurance.