Primerica Life Insurance Practice Exam 2025 – The All-in-One Guide to Master Your Certification!

A variable life insurance policy allows the policyholder to allocate the cash value to a variety of investment options, such as stocks and bonds. This investment potential is what leads to the possibility of increased cash value over time. Because the cash value is tied to the performance of these investments, it can grow more significantly compared to other types of life insurance policies that might have a guaranteed cash value based on a fixed interest rate.

As the investments perform well, the cash value increases, thereby providing policyholders with the opportunity for greater wealth accumulation. This feature distinguishes variable life insurance from whole life insurance, where cash value growth is typically more stable and predictable but may not have the same growth potential. Thus, the potential for increased cash value is a defining characteristic of variable life insurance policies.