Final answer:
The value of the contract owner's separate accounts in a variable annuity during the accumulation period is calculated based on the performance of chosen investments, unlike cash-value life insurance which grows at a fixed interest rate.
Step-by-step explanation:
In an accumulation period of a variable annuity, the value of the contract owner's portion of the separate accounts is calculated based on the performance of chosen investments. The value of these separate accounts can fluctuate with the market conditions and performance of the underlying investments selected by the contract owner. Unlike cash-value (whole) life insurance, which has a death benefit and accumulates a cash value at a fixed interest rate set by the insurer, the variable annuity's separate accounts do not grow at a guaranteed rate. Instead, the growth potential and accumulated value are directly tied to how well the investments in the separate accounts perform.