Which Statement is True Regarding a Variable Whole Life Policy?

Variable whole life insurance is a type of permanent life insurance that offers the potential for growth through investments. The policyholder has the flexibility to choose how the policy's cash value is invested, and the policy's death benefit is guaranteed, regardless of the performance of the investments.

Here are some of the key features of variable whole life insurance:

• The policyholder has the flexibility to choose how the policy's cash value is invested. The policyholder can choose from a variety of investment options, including stocks, bonds, and mutual funds.
• The policy's death benefit is guaranteed, regardless of the performance of the investments. The policy's death benefit is based on the face amount of the policy and the policyholder's age at the time of death.
• The policyholder can access the policy's cash value through loans or withdrawals. The policyholder can borrow against the policy's cash value or withdraw it to pay for unexpected expenses.
• The policyholder can pay premiums on a flexible basis. The policyholder can choose to pay premiums monthly, quarterly, or annually.

Here are some of the benefits of variable whole life insurance:

• The potential for growth through investments. The policyholder has the potential to earn a return on their investment, which can help the policy grow over time.
• The flexibility to access the policy's cash value. The policyholder can access the policy's cash value through loans or withdrawals, which can be helpful for unexpected expenses.
• The peace of mind of knowing that the policy's death benefit is guaranteed. The policyholder's family will receive the death benefit, regardless of the performance of the investments.

Here are some of the drawbacks of variable whole life insurance:

• The potential for loss through investments. The policyholder's investments can lose value, which can reduce the policy's cash value and death benefit.
• The cost of the policy. Variable whole life insurance policies are more expensive than term life insurance policies.
• The complexity of the policy. Variable whole life insurance policies can be complex and difficult to understand.

Which statement is true regarding a variable whole life policy?

• (A) The policyholder has the flexibility to choose how the policy's cash value is invested.
• (B) The policy's death benefit is guaranteed, regardless of the performance of the investments.
• (C) The policyholder can access the policy's cash value through loans or withdrawals.
• (D) All of the above.

Answer: D

Additional information:

Variable whole life insurance policies are a complex financial product. It is important to understand the features, benefits, and drawbacks of the policy before you purchase it. You should also consult with a financial advisor to help you determine if a variable whole life insurance policy is right for you.