What is "variable life insurance"?

Variable life insurance is indeed a permanent life insurance policy that allows the policyholder to invest the cash value in various investment options, such as stocks, bonds, or mutual funds. This type of policy not only provides a death benefit to beneficiaries but also offers the potential for cash value growth that fluctuates based on the performance of the chosen investments.

The unique feature of variable life insurance is its flexibility; policyholders can allocate their cash value among different investment choices and adjust their premium payments within certain limits. This means that the cash value can increase or decrease over time, depending on the success of the investments chosen, which differentiates it from other types of life insurance products.

Additionally, the death benefit can vary as it may increase or decrease based on the investment performance, offering an opportunity for greater returns than traditional whole life or term insurance policies that guarantee fixed payouts. Thus, this option accurately captures the essence of what variable life insurance entails.