Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Which statement is correct about the death benefit of a variable life insurance policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Variable life insurance divides premiums among separate-account subaccounts whose investment performance is borne by the policyowner. Even so, the policy guarantees a minimum death benefit: as long as premiums are paid, the death benefit will not fall below a guaranteed floor even if the subaccounts perform poorly. The cash value, however, is not guaranteed and fluctuates with investment results. Because variable products are securities, they require FINRA registration and the delivery of a prospectus.
Why the other options are wrong
- B) A guaranteed minimum death benefit floor exists, so the benefit does not track investments without any floor.
- C) The death benefit is not fixed at the level premium amount; variable life allows investment-driven increases above the guaranteed minimum.
- D) Death benefits are set by the policy contract and investment performance, not by the insurer's board.
Memory hook
Variable life: investment risk is yours, but the death benefit has a guaranteed floor.