Which statement regarding flexibility features of variable life policies is incorrect?

In variable life insurance policies, policyholders have the option to borrow against the cash value of their policy, but this is subject to specific limits. Typically, policyholders can take loans up to a specified percentage of the cash value, rather than against the entire withdrawal value of the policy. If a policyholder attempted to take out a loan for the entire withdrawal value, it could potentially lead to negative tax implications and conflict with the policy's terms regarding maximum loan amounts.

The other options accurately reflect the features of variable life policies. For instance, policyholders can make partial withdrawals from their policy by cashing in units at the bid price, which is standard practice as it allows them to access funds while leaving their investment strategy intact. Similarly, switching between different investment funds is allowed, provided that the policyholder meets the insurer's criteria for such changes. Furthermore, the ability to adjust premium payments—by increasing or decreasing them—is a notable flexibility feature of variable life policies, allowing policyholders to adapt their contributions according to their changing financial circumstances.