Which of the following statements differentiates Variable Whole Life and Variable Universal Life?

The distinction between Variable Whole Life and Variable Universal Life primarily revolves around the death benefits they guarantee and their flexible features. The statement identifying that Variable Universal Life has no guaranteed minimum death benefit is accurate, as it effectively highlights one of the key differences between these two products.

Variable Universal Life (VUL) insurance typically does not offer a guaranteed minimum death benefit, meaning that the death benefit can fluctuate depending on the performance of the underlying investments chosen by the policyholder. In contrast, Variable Whole Life generally comes with a defined minimum death benefit, providing a safety net for the insured's beneficiaries regardless of the investment performance.

This aspect of VUL aligns with its more flexible design, where policyholders can adjust the premium payments and potentially increase or reduce their coverage amount, but without the assurance of a guaranteed minimum. This allows individuals who prefer a more variable approach to their life insurance and are willing to assume more investment risk in exchange for the ability to manage their premiums and death benefits as their financial situation changes.

Understanding these characteristics is essential for determining the appropriate type of life insurance based on individual needs and risk tolerance.