Final answer:
Variable Whole Life Insurance is a combination of insurance and securities products, offering a death benefit along with a cash value account that can be invested, with the policyholder bearing the investment risk. So, the correct answer is option 1) both an insurance and securities product.
Step-by-step explanation:
Variable Whole Life Insurance is best described as both an insurance and securities product. This type of life insurance policy includes a death benefit and an investment feature where the cash value of the policy can be invested in a variety of separate accounts, similar to mutual funds.
The policyholder can manage these investments based on their risk tolerance and investment goals, providing potential for higher returns compared to traditional whole life insurance policies.
However, with the potential for higher returns comes greater risk, as the investment portion of the policy can fluctuate with market conditions. This means that unlike traditional whole life insurance, the policyholder assumes the investment risk rather than the insurance company.
Therefore, the correct answer to the given question is option 1) both an insurance and securities product.