Final answer:
The statement is TRUE; both whole life and variable life insurance policies offer a guaranteed death benefit. Whole life insurance has a cash value component, and variable life insurance allows investment of the cash value, affecting the policy's returns.
Step-by-step explanation:
Whole life and variable life insurance policies indeed both come with a guaranteed death benefit. This means that upon the death of the insured, the policy will pay out a specified amount to the beneficiaries. Therefore, the answer to the question is TRUE.
Cash-value (whole) life insurance provides not only a death benefit but also a cash value accumulation over time. This cash value can be utilized during the policyholder's lifetime under certain conditions. On the other hand, variable life insurance includes a death benefit. It allows the policy owner to invest the policy's cash value in various investment options, which can lead to variable returns.
When it comes to setting premiums for life insurance policies, actuaries must consider the probability of a claim being made. If insurance companies were selling life insurance separately to groups based on family cancer histories, the premium would reflect the different levels of risk associated with each group. If they sell the insurance indiscriminately without factoring in this risk, as shown in the given example, the actuarially fair premium would likely be a blend of both groups' risk levels.