Questions: Which of the following determines the cash value of a variable life policy? A. The performance of the policy portfolio B. The company's general account C. The policy's guarantees. D. The premium mode

The answer is the first one (A): The performance of the policy portfolio.

Explanation for each option:

A. The performance of the policy portfolio - Correct. In a variable life insurance policy, the cash value is directly linked to the performance of the investment options chosen by the policyholder. These options are typically a variety of sub-accounts that resemble mutual funds, and the cash value fluctuates based on their performance.

B. The company's general account - Incorrect. The general account of an insurance company is used for traditional life insurance policies, where the insurer bears the investment risk. In variable life policies, the cash value is not tied to the general account but to separate accounts chosen by the policyholder.

C. The policy's guarantees - Incorrect. Variable life insurance policies typically do not have guaranteed cash values. The cash value is subject to market risk and can increase or decrease based on the performance of the chosen investments.

D. The premium mode - Incorrect. The premium mode refers to the frequency with which premiums are paid (e.g., monthly, quarterly, annually) and does not determine the cash value of a variable life policy.

In summary, the cash value of a variable life policy is determined by the performance of the policy portfolio, which consists of the investment options selected by the policyholder.