State RegulationsNY specificDifficulty 1/5
What feature most distinguishes a variable life insurance policy from a traditional whole life policy sold in New York?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
A variable life policy invests premiums in a separate account, so the cash value — and typically the death benefit — rise and fall with investment performance rather than being fixed as in traditional whole life. New York regulates these contracts through the Superintendent under Reg 47 (11 NYCRR Part 50.3), Reg 77 (11 NYCRR Part 54.3), and N.Y. Ins. Law §4240, alongside federal securities oversight.
Why the other options are wrong
- A) Dividend experience drives participating whole life policies, not the separate-account performance that defines variable life.
- C) Variable life does not guarantee a dividend; investment results are passed through to the separate account, not promised.
- D) Variable life policies build cash value and can be surrendered; there is no bar on cash surrender.
Memory hook
Variable means the separate account does the driving.