What type of life insurance has cash values that fluctuate based on investment performance?

Variable Whole Life insurance is designed to allow policyholders to invest the cash value portion in various investment options, such as stocks or bonds. The cash value in this type of policy can change based on the performance of these investments. This means that the policy’s cash value and potentially the death benefit can increase or decrease, depending on how well the chosen investments perform.

This differs from other types of life insurance. For instance, Increasing Term Life provides a death benefit that increases over time but does not have cash value that can fluctuate. Modified Whole Life typically starts with lower premiums that increase later but maintains a fixed cash value. Adjustable Whole Life allows for changes in premiums and death benefits but does not have variable investment options influencing cash value. Thus, the distinct feature of Variable Whole Life is its link to investment performance, enabling growth in cash value that is not guaranteed, depending on market conditions and investment choices.