Ace the Pearson VUE Life Insurance Exam 2025 – Insure Your Success with Confidence!

The type of life insurance policy that guarantees a minimum death benefit while also allowing for investment in separate accounts is variable life insurance. This policy provides policyholders with the flexibility to allocate their cash value among a variety of separate investment accounts, similar to mutual funds. The policy guarantees a minimum death benefit, which means that regardless of how the investments perform, the beneficiaries will receive at least this minimum amount upon the insured's death.

Variable life insurance offers the potential for growth through investments, which can help the cash value of the policy appreciate over time based on market performance. However, it also introduces an element of risk, as the cash value and potentially the death benefit can fluctuate depending on the performance of the chosen investments. This combination of a guaranteed minimum death benefit and investment opportunities is distinctive to variable life policies, making them attractive to those who want both life insurance protection and the potential for higher returns through investment.