Which statement about variable life insurance policies is FALSE?

Variable life insurance policies are designed with features that differentiate them from traditional whole life policies. One of the core characteristics of variable life insurance is that the cash value and death benefits can fluctuate based on the performance of investments chosen by the policyholder, which directly relates to why the first statement is true.

The statement regarding a guaranteed fixed minimum sum assured is not accurate for variable life insurance. Unlike permanent life insurance policies that may guarantee a minimum death benefit, variable life insurance does not guarantee that the sum assured will remain fixed. Instead, the death benefit can change depending on the performance of the underlying investment accounts, meaning it can go up or down based on market performance.

Variable life insurance is also characterized by linking to investment performance, allowing the policyholder to choose investment options, which can include stocks, bonds, and mutual funds. This feature is what allows for potentially higher returns, but it also comes with greater risk, as the values can decrease as well.

The flexibility in premium payments is another hallmark of variable life policies, allowing policyholders to adjust their premium payments according to their financial situations, which enhances the product's attractiveness and adaptability to individual needs.

Considering these features, the statement about the guaranteed fixed minimum sum assured is indeed false, as it misrep