An insurance policy classified as a securities product is known as what?

A policy classified as a securities product is known as variable life insurance. This classification arises from the unique features of variable life insurance that combine the benefits of a whole life policy with investment options.

In variable life insurance, policyholders have the ability to allocate their premiums among various investment options, including stocks, bonds, and mutual funds. The cash value and death benefit can fluctuate based on the performance of the chosen investments. Because of this investment component, variable life insurance is regulated as a security and requires both insurance and securities licenses to sell.

This distinguishes it from other types of life insurance, such as term life insurance, which provides coverage for a fixed period without any investment component, or universal life insurance and indexed life insurance, which may have cash value components but do not qualify as security products due to their more limited investment options and lower degree of risk.