What typically happens to the death benefit in a variable universal life policy when the variable death benefit option is chosen?

In a variable universal life policy, selecting the variable death benefit option allows the death benefit to fluctuate based on the performance of the underlying investment account. This option is tied directly to the value of the investments within the policy, which means that as the value of these investments changes—whether increasing or decreasing—the death benefit will also change correspondingly.

When the investment performance is favorable and the cash account value grows, the death benefit may increase. Conversely, if the investments perform poorly, the death benefit can decrease. This feature provides the policyholder with the potential for growth in the death benefit tied to market performance, offering more flexibility compared to a fixed death benefit option that remains constant throughout the policy's life.

Choosing this option gives policyholders exposure to the market's volatility, thereby allowing their death benefit to adapt to the economic environment. This characteristic makes variable universal life policies unique compared to more traditional insurance products where the death benefits typically remain stagnant.