Which of the following statements are true about variable life policies?

The statement regarding variable life policies that is correct is about the necessity for a life insurance company to maintain separate accounts for these policies. Variable life insurance is designed to offer policyholders the ability to allocate their cash value among various investment options, such as stocks and bonds. Since the performance of these investments directly affects the cash value and the death benefit of the policy, insurers are legally required to keep the funds associated with variable life policies in separate accounts. This separation is crucial to ensure that the policyholders’ investments are protected and managed independently from the insurance company’s general assets, reflecting the unique nature and fluctuating value of the investments selected by the policyholder.

In contrast, the other statements do not accurately reflect the characteristics of variable life policies. The determination of policy value based on an offer price at the time of valuation does not apply, as the value is influenced by the performance of the underlying investments, not simply an offer price. Additionally, variable life policies do not function like endowment policies in terms of cash value and dividends, as they primarily focus on investment performance rather than guaranteed cash value accumulation or dividends. Therefore, the necessity of a separate account for variable life policies stands as the true statement.