What is a "No-Lapse Guarantee" in Variable Life Insurance?

A "No-Lapse Guarantee" in Variable Life Insurance refers specifically to a provision that ensures the policy remains in force even if the cash value falls to zero, provided that certain premiums are paid. This feature is particularly important because it protects the policyholder from losing coverage due to a decline in the investment performance of the underlying cash value or due to the withdrawal of funds.

In essence, the No-Lapse Guarantee ensures that as long as the policyholder pays the minimum required premium, the policy will not lapse—it will remain active regardless of changes in account value. This offers a level of security to policyholders, allowing them to maintain their life insurance coverage without fear of losing it due to market fluctuations.

The other choices do not accurately reflect the purpose or functionality of the No-Lapse Guarantee. Each of those options discusses different aspects of a life insurance policy that are not related to the No-Lapse Guarantee provision.