Which type of policy allows investment in various options within life insurance?

Variable life insurance is a type of policy that allows the policyholder to allocate a portion of the premium payments to various investment options, typically including stocks, bonds, and mutual funds. This flexibility enables the policyholder to potentially increase the cash value of the policy and the death benefit over time based on the performance of the chosen investments.

In contrast, term life insurance provides only a death benefit for a specified period and does not build cash value or offer investment options. Whole life insurance offers a guaranteed death benefit and cash value accumulation but has fixed premiums and does not allow for investment choices—meaning the policyholder does not have the ability to select how the cash value is invested. Universal life insurance provides more flexibility than whole life insurance regarding premiums and death benefits but still does not have the same level of investment options as variable life insurance.

Thus, variable life insurance stands out by incorporating investment components into the life insurance policy, allowing for greater control over financial growth.