Which of the following statements are TRUE?

Which of the following statements are TRUE?

• A. The policy value of Variable Life policies is determined by the offer price at the time of valuation.
• B. The policy value of Endowment policies is the cash value plus accumulated dividends less outstanding loans.
• C. The life company must maintain a separate account for Variable Life policies distinct from the general account.
• D. The policy values of all life policies are guaranteed regardless of market conditions.

Answer: (D)

The statement indicating that the life company must maintain a separate account for Variable Life policies distinct from the general account is accurate. Variable Life Insurance (VLI) policies contain elements that allow policyholders to direct their premiums into various investment options, such as stocks or bonds. Unlike traditional life insurance policies, which invest solely in the insurer's general account, the separate account for Variable Life policies helps ensure that the investment performance of the underlying assets directly influences the cash value and death benefit of the policy. This structure helps to keep the policyholder's investment results separate from the insurer's other assets and liabilities, thus managing risk and ensuring clearer transparency regarding performance.

The statement indicating that the life company must maintain a separate account for Variable Life policies distinct from the general account is accurate. Variable Life Insurance (VLI) policies contain elements that allow policyholders to direct their premiums into various investment options, such as stocks or bonds. Unlike traditional life insurance policies, which invest solely in the insurer's general account, the separate account for Variable Life policies helps ensure that the investment performance of the underlying assets directly influences the cash value and death benefit of the policy. This structure helps to keep the policyholder's investment results separate from the insurer's other assets and liabilities, thus managing risk and ensuring clearer transparency regarding performance.