What happens if the cash value of a Variable Life policy becomes insufficient to cover the cost of insurance?

A Variable Life policy is designed to provide both a death benefit and a cash value that can grow based on the performance of the underlying investment options. The cash value of the policy is crucial because it helps to pay for the cost of insurance and any other policy charges.

If the cash value falls below a certain level and is insufficient to cover the cost of insurance, the policy could lapse. This means that the insurance coverage would end because the policyholder has not maintained sufficient funding. In this scenario, if premiums are also insufficient or not paid, the policy does not have the necessary funds to sustain itself, which can lead to a lapse in coverage. This is a fundamental principle in variable life insurance, where the policyholder typically takes on more responsibility for maintaining the policy through premium payments and investment choices.

The other options do not accurately reflect how Variable Life policies operate. For instance, an automatic renewal does not apply, as these policies often require proactive management by the policyholder. The insurer covering any shortfall is also inaccurate, as it is ultimately the policyholder's responsibility to ensure that sufficient funds are in place. Lastly, canceling the investment options would not directly resolve the issue of insufficient cash value to cover insurance costs. Therefore, the possibility of the