Final answer:
The premium rate is not a guaranteed feature in a variable life insurance policy. Premiums can vary in these policies due to the investment component. Insurance companies calculate premiums based on statistical risks to balance potential payouts with profitability.
Step-by-step explanation:
The question posed concerns variable life insurance, which is a type of life insurance policy that includes both a death benefit and an investment component, where the value can fluctuate based on the performance of the investment options. In contrast to cash-value (whole) life insurance, which does guarantee a death benefit and a cash value account, variable life insurance policies do not guarantee a set premium rate.
Under variable life insurance policies, while the death benefit is guaranteed and there is a period of death protection, the premiums paid by the policyholder are not fixed and may vary depending on the underlying investment performance as well as other factors dictated by the insurance company's policies.
By comparing actuarially fair premiums for groups with different risk profiles, such as those with a family history of cancer versus those without, we can understand the risks insurance companies assess when determining premiums. These companies use statistical calculations to set premiums that reflect the likelihood of a claim being made, balancing the need to cover potential payouts while aiming for profitability.