Variable Life insurance is based on what kind of premium structure?

Variable Life insurance features a flexible premium structure, allowing policyholders to pay varying amounts into their policy, unlike a level fixed premium that is consistent throughout. This flexibility enables policyholders to adjust their premiums according to their financial situation or investment goals. The premiums can be allocated among various investment options, which can affect the cash value and death benefit of the policy.

The characteristic of a variable premium relates to the possibility of changing the amount paid into the policy within certain limits, but it does not fully capture the essence of Variable Life insurance's design. In contrast, a decreasing premium generally refers to term insurance products where premiums may reduce over time, not applicable in this context.

Understanding the flexible premium aspect is crucial, as it empowers policyholders with more control over their investment choices while also allowing the potential for a higher return based on the performance of the selected investments. This nuance is why flexible premium is the correct understanding in the context of Variable Life insurance.