Which of the following options correctly describes withdrawals under variable life insurance policies?

Withdrawals in variable life insurance policies are designed to offer policyholders flexibility with their cash value. The correct description indicates that withdrawals can occur after a minimum number of premium payments have been made. This feature allows policyholders to access funds from the accumulated cash value without needing to terminate the policy.

Typically, these policies have requirements that dictate when withdrawals can be made, which often include having made a certain number of premium payments. This is important because it ensures that there is a sufficient cash value available before a policyholder can access their funds, aligning with the purpose of the insurance product, which is to provide both a death benefit and a savings/investment component.

Other options, while they reference consequences or requirements related to withdrawals, do not accurately reflect the general terms of variable life insurance policies. For instance, the notion of withdrawals being allowed only upon policy termination is incorrect, as many policies permit withdrawals to be made while the policy is active, provided certain conditions are met. The idea that withdrawals automatically reduce coverage by half misrepresents how withdrawals impact the policy's death benefit and cash value, which typically depend on the amount withdrawn. Lastly, while some policies might include fees for withdrawals, stating that there is a high penalty charge every time does not