What characteristic is associated with a Variable Life policy?

A Variable Life policy is characterized by its provision for investment options. This type of insurance allows policyholders to allocate a portion of their premium payments to a variety of investment accounts, which can include stocks, bonds, and mutual funds. The performance of these investments directly impacts the cash value and death benefit of the policy. Unlike traditional whole life insurance policies that typically offer guaranteed cash values and fixed premiums, Variable Life policies provide the potential for higher returns based on the performance of chosen investments, but they also come with increased risk. The policyholder's choice of investments is crucial as it determines both the growth potential and the eventual benefits realized from the policy.

In contrast, fixed premiums are generally associated with whole life policies, while the absence of cash value is characteristic of term life insurance. A guaranteed face amount pertains to traditional policies that ensure the death benefit, regardless of market fluctuations impacting the cash value, which is not the case in Variable Life policies.