Which of the following statements about variable life fund benefits is FALSE?

In the context of variable life insurance policies, it's important to understand the nature of the investments and the associated risks. One key aspect is that the returns from the investment component of variable life insurance are not guaranteed. Unlike whole life insurance policies that typically guarantee a minimum return on cash values, variable life insurance allows policyholders to invest in various sub-accounts, which can fluctuate in value based on market performance.

Given this, stating that the fund guarantees high yields regularly is inaccurate. Variable life insurance is designed to offer the potential for higher returns based on the market performance of the investments chosen by the policyholder; however, these returns may vary widely and come with associated risks. This characteristic differentiates variable life products from those that provide guaranteed returns.

The other statements reflect accurate features of variable life insurance. Policy owners can indeed easily switch investments among available sub-accounts, they have the flexibility to take premium holidays (periods where they do not have to make premium payments while the policy remains in force), and the investment component inherently offers the potential for higher returns compared to fixed or guaranteed options. Therefore, the false statement clearly identifies the misconception about guaranteed high yields in variable life funds.