Final answer:
A major difference between a variable life policy and a universal policy is the premium flexibility. Variable life policies allow policyholders to adjust their premiums and even skip payments, while universal policies generally require regular premium payments.
Step-by-step explanation:
Investment options are another significant difference, with variable life policies offering a range of investment options and universal policies offering a fixed interest rate on the accumulated cash value.
A major difference between a variable life policy and a universal policy is the premium flexibility.
Variable life policies typically allow policyholders to adjust their premiums and even skip payments, as long as there is enough cash value in the policy to cover expenses.
Universal policies, on the other hand, generally require regular premium payments.
Investment options is another significant difference between variable life and universal policies.
Variable life policies allow policyholders to invest a portion of their premium payments into various investment options such as stocks and bonds. Universal policies typically offer a fixed interest rate on the accumulated cash value.
Both variable life and universal policies have a death benefit amount, which is the amount that will be paid out to beneficiaries upon the death of the insured.
The death benefit amount can be chosen by the policyholder and can vary depending on their needs and preferences.
Lastly, both types of policies have a cash value accumulation component, which is the amount that accumulates over time and can be accessed by the policyholder through loans or withdrawals.