A variable life insurance policy is considered riskier than a traditional whole life policy because it:
A)invests savings more aggressively in securities that are riskier but offer higher potential returns.
B)has no disability provision to waive premiums in the event of a serious accident or prolonged illness.
C)may not allow the holder to renew the policy after the initial five year period has elapsed.
D)pays only a very small death benefit unless the policy holder lives for at least 12 years after taking out the policy.

Question

Quizplus · Accepted Answer

Variable life insurance policies invest the savings component of the policy in a separate account that can hold a variety of securities, such as stocks, bonds, and mutual funds. These securities can have higher potential returns, but they also carry more risk than the fixed-interest investments used in traditional whole life policies.

A Variable Life Insurance Policy Is Considered Riskier Than a Traditional