How does the cash value of a Variable Life Insurance policy grow?

The cash value of a Variable Life Insurance policy grows based on the performance of the investment options selected by the policyholder. This type of policy offers a range of investment choices, such as stocks, bonds, and mutual funds, allowing the policyholder to potentially increase their cash value depending on market performance. Unlike traditional whole life policies that grow at a fixed interest rate, the growth in cash value with Variable Life Insurance is directly tied to the gains or losses from the chosen investments. As such, if the investments perform well, the cash value will increase, while poor performance could result in little to no growth or even a decline in cash value, highlighting the policyholder's active role in managing their investment choices.