What occurs to the cash value of a Variable Life Insurance policy if the insured passes away?

In a Variable Life Insurance policy, when the insured passes away, the cash value of the policy does indeed cease to exist and is not paid out independently of the death benefit. Instead, the death benefit, which is the amount payable to the beneficiaries upon the insured's death, becomes the primary focus. This benefit is typically comprised of a minimum guaranteed amount plus any additional value based on the policy's underlying investments, but the cash value component itself is not provided to beneficiaries.

This structure emphasizes that the intent of life insurance is primarily to provide financial protection to the insured's beneficiaries in the event of death, rather than to distribute accumulated cash values. The cash value, which may have accumulated over the life of the policy, effectively disappears upon the insured's death, being replaced by the payout of the death benefit to the beneficiaries instead. Thus, the correct response acknowledges that the cash value does not continue or transfer beyond the life of the insured.