The characteristics of a Variable Life insurance policy include which of the following?

A Variable Life insurance policy is characterized by its flexible premium payments and the ability to allocate cash value among a variety of investment options, such as stocks, bonds, and mutual funds. One key feature is that its withdrawal value and protection benefits are directly influenced by the investment performance of those underlying assets. This means that the cash value can fluctuate, providing the policyholder with both opportunities for growth and risks associated with market performance.

Additionally, in Variable Life insurance, the costs associated with providing protection—such as mortality charges—are often deducted from the cash value of the policy through implicit charges. These costs can vary based on the insurer's overall expense structure and the performance of the investments chosen by the policyholder.

The comprehensive nature of these characteristics aligns with the option stating I, II, and IV. This option encapsulates the interrelated aspects of performance-based benefits, the nature of protection costs, and how changes in costs are communicated to policyholders. Thus, the correct option embraces these essential elements that define a Variable Life insurance policy.