What type of insurance allows cash value to be invested in different securities?

Variable life insurance is a type of permanent life insurance that combines a death benefit with an investment component. The cash value of a variable life policy can be allocated to a variety of investment options, including stocks, bonds, and mutual funds, giving policyholders the opportunity to grow their cash value based on the performance of these investments.

This flexibility allows policyholders to take on more investment risk for the potential of higher returns, as opposed to whole life insurance, which generally has a guaranteed cash value growth, or universal life insurance, which provides more flexible premium payments but usually invests in a more conservative manner. Term life insurance, on the other hand, does not accumulate cash value at all, as it only provides coverage for a specified term. Therefore, variable life insurance uniquely offers the combination of life coverage and the potential for cash value growth through investment in different securities.