Which of the following allows policyholders to add more units to their account in variable life policies?

Prepare for the Variable Life Licensing Exam. Study with flashcards and multiple-choice questions. Each question offers hints and explanations for better understanding. Equip yourself with the knowledge to succeed in your exam!

In the context of variable life policies, single premium payments allow policyholders to add more units to their account. A single premium payment refers to a one-time lump sum payment made by the policyholder to fund the policy. This injection of cash can directly purchase additional units or shares in the investment options provided by the policy.

Moreover, single premium payments can be particularly advantageous for individuals looking to quickly increase their investment in the policy without the need for ongoing contributions. When the policyholder makes such a payment, it increases the cash value and potential growth of the death benefit, thereby enhancing the overall value of the policy.

While regular premium payments do contribute to the policy's cash value and may also increase units over time, they do not facilitate the same immediate addition of units that a single premium can accomplish. Automatic reinvestment of dividends primarily pertains to the reinvestment of any earnings that the policy may generate rather than direct additional unit purchases. Participation in investment growth refers to the growth that may occur due to market performance but doesn’t allow for direct additions of units to the account.

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