What describes a life insurance policy that includes investment elements?

A life insurance policy that includes investment elements is best represented by variable life insurance. This type of policy not only provides a death benefit but also incorporates a cash value component that can be invested in various investment options, such as stocks and bonds. The policyholder has the flexibility to allocate their cash value among different investment options, which means the value of the policy can fluctuate based on the performance of those investments.

This feature distinguishes variable life insurance from other types of life insurance. For example, term life insurance mainly provides coverage for a specified term without any cash value. Whole life insurance offers a guaranteed death benefit and a cash value that grows at a predetermined rate but does not allow for investment in various investment vehicles. Universal life insurance provides more flexible premiums and death benefits than whole life, but it typically does not have the same investment options or risk associated with fluctuating market values as variable life insurance does.

Therefore, variable life insurance is accurately characterized by its combination of life insurance protection and investment growth potential, making it the correct choice for describing a policy with investment elements.