Which of the following statements about the risk of investing in Variable Life funds is TRUE?

The statement that policyowners who invest in Variable Life funds with high equity investment face greater risk but can expect higher returns than Traditional Life insurance products over the long term is accurate. This is rooted in the fundamental nature of Variable Life insurance products, which allow policyowners to allocate their premiums among various investment options, including equities.

Investing in equities generally involves a higher level of risk due to market volatility, but it also offers the potential for higher returns compared to more conservative investments. Over the long term, equity markets have historically provided greater returns than fixed-income investments or more conservative life insurance products that typically offer guaranteed cash values and lower risks. Therefore, while policyowners face the possibility of fluctuating values and market risk, the long-term growth potential associated with investing in equities makes it a viable option for those willing to accept that risk.

In contrast, policyowners who are risk-averse typically prefer more stable investment options, which align with guaranteed cash values and lower-risk products. Such individuals may not benefit from the growth potential of high equity investments and instead favor traditional policies that provide security and certainty. Thus, for those looking for higher return prospects and willing to accept associated risks, investing in Variable Life funds with a focus on equity makes sense, highlighting why