New York Insurance Exam Practice Question
Which of the following is a characteristic of variable life insurance?
Correct Answer: C
Rationale: Variable life insurance allows policyholders to allocate a portion of their premiums to various investment options, thus bearing the investment risk. This means that the cash value and death benefit can fluctuate based on the performance of these investments.
Option A is incorrect because variable life insurance features flexible premiums, not fixed ones. Option B is misleading; while there is a cash value, it is not guaranteed and can vary with investment performance. Option D is also incorrect, as variable life insurance does provide a death benefit, which can change based on the policy's investment outcomes.
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