Final answer:
The Variable life policy provides policyowners with flexibility and control over the investment part of their life insurance contract, allowing for investment in various market options. The actuarially fair premium depends on risk factors like family health history. Life insurance is a financial safeguard for families in case of the policyholder's death. The correct answer is option A. Continuous premium life policy
Step-by-step explanation:
Among the life insurance policies available, the Variable life policy is known for providing the policyowner with both flexibility and control over the investment portion of the contract. This type of policy allows policyholders to allocate premiums to a range of investment options, including stocks, bonds, and money market funds. The cash value and the death benefit can fluctuate based on the performance of these investments, unlike other policies such as Whole life policy or Continuous premium life policy which have fixed values determined by the insurer.
The actuarially fair premium for a life insurance policy depends on the risk profile of the individual or group being insured. For example, if there is a family history of cancer, this would typically result in higher premiums for those individuals assuming the insurer has this information. However, if the insurer offers a uniform rate to a group without this knowledge, the actuarially fair premium would be averaged to accommodate the mixed risk levels of all members of the group.
Life insurance is one of the many types of insurance that individuals may carry, which also includes health, car, and property insurance, each serving a unique purpose in providing financial protection against various risks.