New Jersey Life Producer Practice Exam 2025 – Your Complete All-in-One Guide to Exam Success!

The statement regarding variable life insurance that is true is that the cash value can fluctuate based on investment performance. This feature distinguishes variable life insurance from other traditional life insurance products, as the cash value is tied to the performance of investment options chosen by the policyholder. These investment options typically include stocks, bonds, and mutual funds, and the policyholder has the flexibility to allocate premiums among the available choices. As a result, the cash value can increase or decrease depending on the market performance of the selected investments, which introduces a level of risk, but also the potential for higher growth compared to fixed life insurance policies.

Fixed investment returns, while characteristic of other life insurance types, do not apply to variable life insurance, making that statement inaccurate. Additionally, while variable life insurance generally includes a death benefit, it may not always guarantee a minimum level; thus, the claim of guaranteeing a minimum death benefit is misleading. Lastly, variable life insurance typically comes with various fees and charges associated with maintaining the policy and managing investment accounts, contrasting the idea that it has no associated fees or charges. These nuances help clarify the nature of variable life insurance as a flexible investment strategy rather than a fixed-return or fee-free product.