Answer:
A variable insurance policy guarantees a minimum rate of return is (2) False statement.
Step-by-step explanation:
A variable insurance policy does not guarantee a minimum rate of return. Unlike traditional life insurance policies or certain investment vehicles, variable insurance policies are linked to investment accounts. The value of these policies can fluctuate based on the performance of the underlying investments, typically mutual funds. As such, there is no guaranteed minimum rate of return. The policyholder assumes the investment risk, and returns are subject to market conditions.
Variable insurance policies provide individuals with the opportunity for potentially higher returns, but they come with the inherent risk of market volatility. Policyholders have the flexibility to allocate their premiums among different investment options, offering a degree of control over their investment strategy. However, this flexibility also means that the policy's cash value is not guaranteed and may vary based on market performance.
Option is 2 is correct.