Which statement about the charges in variable life policies is true?

In variable life insurance policies, charges associated with the policy, such as administrative fees and cost of insurance, can vary based on the insurance company’s policies. This means that they are not fixed and can be adjusted by the insurer based on a variety of factors, including operational costs and other business considerations. The flexibility in the structure of these charges allows insurers to manage their financial risk and account for changes in the marketplace or their operational needs.

Understanding this variability is crucial for policyholders as it can impact the policy’s cash value and death benefit over time. The charges may be outlined in the policy documentation but can change at the discretion of the insurance company, reflecting their business strategies or financial circumstances.

The other options present misunderstandings about variable life policies. For instance, not all charges are fixed or applied solely at surrender; fees and costs can accumulate throughout the life of the policy as the insured continues to pay premiums. Additionally, it is not accurate to say that there are no charges for administration; in fact, administrative charges are commonly part of such policies and can significantly influence the overall performance of the investment side of the policy.