Every life product answers the same three questions

• A life policy is defined by three answers: how long the coverage lasts, whether it builds cash value, and who carries the investment risk. Learn a product by filling in those three and you will not confuse it with its neighbor.
• Term answers "a stated number of years, no cash value, no investment risk to anyone." Whole life answers "for life, guaranteed cash value, risk on the insurer." Universal life keeps the insurer on the risk but makes the premium flexible. Variable products move the investment risk onto the owner.
• Nearly every wrong answer in this area is a product placed on the wrong axis. Candidates say variable life when they mean universal life because both sound modern, when the actual difference is which party loses money if the investments perform badly.

derivation: Traditional whole life products