An insurance policy that provides a fixed death benefit plus a cash value that can be invested in a variety of funds from which the policyholder can choose. First introduced in 1975, variable life policies gained popularity after 1980 as an insurance vehicle providing some protection against inflation. Like whole life policies, variable life policies require level premium payments throughout the policyholder’s life, but there are important differences. For example, excess premiums that add cash value earn variable, not fixed, rates return, based on the insurer’s yield on assets of the policyholder’s choice. If the selected assets perform well, cash value and death benefits both increase. If not, the cash value may be zero, so the insured bears the entire investment risk. A minimum death benefit is specified in the policy, although there is no maximum. The actual payment to beneficiaries depends on yields earned on excess premiums.