Variable Life Insurance combines death protection with what type of account?

Variable Life Insurance is designed to provide both a death benefit and a cash value component that can fluctuate based on the performance of underlying investment options. This cash value component is usually allocated among various investment vehicles such as stocks, bonds, and mutual funds.

The primary feature of variable life insurance is that policyholders can allocate their cash value into different portfolios or investment funds, which can lead to potential growth based on the performance of those investments. Since the returns are linked to the market, the cash value and the death benefit can vary, making it distinct from other forms of insurance where cash values are more stable and traditionally guaranteed.

By utilizing stocks, bonds, and mutual funds, policyholders have the opportunity to grow their investment over time, which is not offered in more conventional life insurance options where cash values may simply accumulate at a guaranteed rate. This investment flexibility is a key characteristic of variable life insurance, allowing individuals to take a more proactive role in their policy's performance and potential growth.