What is a unique characteristic of Variable Life Insurance compared to whole life insurance?

Variable Life Insurance is designed to provide policyholders with the opportunity to invest the cash value in various investment options, such as stocks or bonds. This means that the cash value of the policy can increase or decrease based on the performance of those underlying investments. As a result, policyholders face the risk and potential reward associated with market fluctuations, making the cash value less predictable than that of whole life insurance, which typically offers guaranteed growth.

In contrast, whole life insurance features a stable and guaranteed cash value growth, along with fixed premiums and death benefits. The investment aspect of Variable Life Insurance is what distinctly sets it apart, allowing for flexibility and potentially higher returns, but also coming with an inherent risk due to the volatility of the market. This characteristic is a fundamental part of how Variable Life Insurance operates compared to whole life insurance.