Federal law requires that a prospectus of the variable life product be given to prospective buyers at or before the point of sale, along with a 45-day “free-look” period. The policy owner must also be permitted to convert to a traditional whole life insurance contract within 24 months of policy issuance.

A variable life policy provides cash values which may be withdrawn or borrowed against. The policy owner may also surrender the policy for its current cash value.

There are basically two types of variable life insurance: scheduled premium variable life and flexible premium variable life. Scheduled premium variable life requires a periodic level premium to be paid to keep the policy in force. Flexible premium variable life, also known as variable universal life, provides for variable premiums. It combines the flexibility of universal life insurance with the hedge against inflation of variable life.