Final answer:
Variable life products require a producer to hold both a Life Insurance license and a Securities license, due to the investment component of these products.
Step-by-step explanation:
The student's question pertains to the necessary qualifications for selling variable life insurance products. Specifically, the correct answer to the question is that variable life products require a producer to:
hold a Life Insurance license and a Securities license
Variable life insurance is both an insurance and an investment product. As such, providers must be adequately licensed to advise on risk and investment factors, which typically requires them to hold both a life insurance and a securities license. These requirements ensure that the provider is knowledgeable about the insurance aspects, as well as the investment risks involved.
Understanding the Insurance Business
The fundamental law of insurance dictates that the premiums collected by an insurance company must cover the claims paid out, the operational costs of running the company, and allow for profits. When premiums are set too low by state regulators, insurance companies may seek to insure only low-risk individuals or may choose to withdraw from the market, as over time, the average amount paid to individuals cannot exceed the amount received in premiums.