premium payments are fixed. part of the premiums placed into a separate account, which is invested in stock, bond, or money market fund. the death benefit is guaranteed, but the cash value of the benefit can vary considerably according to the ups and downs of the stock market. your death benefit can also increase if the earnings of that separate fund increase.
variable insurance products do not guarantee contract cash values, and it is the policy owner who assumes the investment risk.
by placing their policy values into separate accounts, policy owners can participate directly in the account's investment performance, which will earn a variable (as opposed to a fixed) return.
because of the transfer of investment risk from the insurer to the policy owner, variable insurance products are considered securities contracts as well as insurance contracts. Therefore, they fall under the regulatory arm of both state offices of insurance regulation and the securities and exchange commission (SEC). to sell variable insurance products, an individual must hold a life insurance license and a financial industry regulatory authority (FINRA) registered representatives license (FINRA was formerly known as the national association of securities dealers, or NASD).