Final answer:
Medical expenses typically cannot be deducted from premium payments or the cash value of a variable life insurance policy; instead, these are personal expenditures. Administrative fees, surrender charges, and investment fees are common costs associated with managing the insurance policy itself. The correct option is 1.
Step-by-step explanation:
The question pertains to which expenses may not be deducted from the premium payments or the cash value of a variable life insurance policy. Of the options provided, medical expenses typically may not be deducted from premium payments or the cash value of a variable life insurance policy.
Variable life insurance policies have associated costs that policyholders are expected to bear, such as administrative fees, surrender charges, and investment fees. These charges are a part of managing the insurance funds and ensuring the policy operations seamlessly. The money paid as premiums goes towards covering these administrative costs, providing death benefits, and contributing to the cash value component of the policy that is invested for potential growth.
However, medical expenses are considered personal expenditures and are therefore not typically part of the costs covered by the insurance policy but are out-of-pocket costs for the policyholder, unless a claim is made under the policy's health-related benefits.
Hence, Option 1 is correct.