What is the structure of a Current Assumption Life policy?

A Current Assumption Life policy is characterized by having flexible premium adjustments. This means that the policyholder has the ability to vary the amount and timing of the premium payments within certain guidelines set by the insurer. The "current assumption" aspect indicates that the insurer regularly reviews its assumptions about investment returns, mortality rates, and other factors, which can influence the policyholder’s cash value and the overall cost of insurance.

As a result, policyholders can adjust their contributions based on their financial situation or changing needs, allowing for greater flexibility compared to more rigid premium structures. This flexibility is particularly attractive for individuals looking for a life insurance solution that can adapt over time to meet their personal financial circumstances and goals.

In contrast, fixed premium policies require uniform payments over the life of the policy, and volatile cash value suggests a lack of stability in the policy's growth, which does not apply to the structured assumptions of Current Assumption Life policies. Furthermore, these policies can indeed pay dividends depending on their performance and design, which is not consistent with the option stating that they do not pay dividends.