Final answer:
A variable life policy offers investment options and is part of a strategy for saving for old age. This policy type allows investment in various products like money-market funds and equities, but carries more risk with the potential for higher returns.
Step-by-step explanation:
A variable life policy offers the owner investment in products such as money-market funds, long-term bonds, and equities. This type of life insurance policy is distinguished by the ability to build a cash value over time, which can then be invested in various financial products. The policyholder has the potential to increase their policy's value depending on the performance of the investments they have chosen. It is a valuable option for those who are saving for old age and seeking private market options for generating additional income in retirement.
Investing in a variable life policy can be part of a comprehensive retirement strategy that includes contributions to savings accounts, purchasing stocks or bonds, and considering annuities with fixed payouts. However, it's important to note that with the potential for higher returns comes greater risk. The cash value of a variable life policy can fluctuate with the changes in the market. Individuals looking to secure their financial future must balance their desire for higher returns with the degree of risk they are willing to accept.