Variable Universal Life/Universal Life Plan Practice Exam 2025 – Comprehensive All-in-One Guide to Master VUL/ULP!

In the context of Variable Life policies, the statement about the volatility of the returns depending on the investment strategy of the fund is accurate. Variable Life insurance allows the policyholder to allocate the cash value among various investment options, typically mutual funds, which can vary widely in terms of investment strategy and associated risks. Because these investments can have differing levels of risk and return, the performance of a Variable Life policy's cash value will fluctuate based on the specific funds selected and their underlying strategies.

Furthermore, it's essential to grasp that the volatility of returns is a hallmark of Variable Life policies. If an aggressive growth fund is chosen, the potential for high volatility and significant gains or losses exists, whereas a conservative fund is likely to offer more stability but with lower returns. Therefore, understanding the investment strategy is crucial for assessing the potential risks and benefits of the policy.

The other statements address important aspects of Variable Life policies, but they do not directly relate to the investment return volatility as outlined in the selected answer. However, the nuances of withdrawal values and control over investment decisions contribute to the overall complexity of Variable Life insurance, reinforcing why comprehending these elements is vital for policyholders and prospective investors.