What is the main benefit of a Variable Life Insurance policy for policyholders?

The main benefit of a Variable Life Insurance policy lies in its potential for cash value growth based on investment performance. Policyholders can allocate their premium payments among a variety of investment options, such as stocks, bonds, and mutual funds. This flexibility allows the cash value of the policy to grow at a rate that corresponds with the performance of the chosen investments, rather than being tied to a fixed interest rate. As a result, if the selected investments perform well, the cash value can increase significantly, which can be a compelling advantage for those seeking both life insurance protection and investment opportunities.

In contrast, guaranteed returns, lower premiums, and fixed interest growth are characteristics typically associated with other types of life insurance or investment products, rather than Variable Life Insurance. Policyholders should understand the risks involved, as the value of their cash value accounts may fluctuate with market conditions. This distinction is crucial in recognizing why the potential for cash value growth is a key feature of Variable Life policies.