Final answer:
In a variable life policy, the defining feature is the underlying equity investment component, which is directly tied to the cash value of the policy. Death benefits, premium payments, and policy loans are also elements of this type of policy, but the presence of investment options is the key distinguishing factor.
Step-by-step explanation:
The question pertains to variable life insurance policies and which elements are considered a part of these policies. A variable life policy is a type of life insurance that combines death benefits with an investment component. The premiums paid by the policyholder are invested in a range of underlying equity investments, the performance of which can affect the value of the policy and the benefits it may pay out.
Policy loans are another feature of some life insurance policies, including variable life policies, allowing the policyholder to borrow against the value of their policy. However, this is not unique to variable policies and is available in different types of life insurance. Therefore, while all the provided options (A. Premium payments, B. Death benefit, C. Underlying equity investment, D. Policy loans) are elements of variable life policies, the defining characteristic separating it from other types of life insurance is the underlying equity investment, which is directly linked to the cash value component of the policy.