In a Variable Life policy, which aspect is true about premiums?

In a Variable Life policy, premiums can indeed vary based on investment performance. This is a key feature of Variable Life insurance, where the policyholder typically has the option to allocate their premiums among various investment accounts, which can include stocks, bonds, and other assets. The performance of these investments directly impacts the cash value of the policy.

Unlike fixed premium policies, the flexibility in Variable Life policies allows policyholders to adjust their premiums and investment choices, meaning that the potential for higher returns—or losses—exists depending on how well the chosen investments perform. This variability is integral to understanding how the cash value and potentially the death benefit of the policy can change over time.

Other choices are less accurate. Fixed premiums do not apply to Variable Life policies because of their nature to allow adjustments. Variable Life premiums are usually more complex than simply being lower or higher compared to term insurance, as they encompass both the cost of insurance and investment factors. Lastly, the payment of premiums does directly affect the cash value of the policy, contrary to the statement that they do not influence it.