Which life insurance policy type involves a monthly mortality charge and self-directed investment choices?

The correct choice is Variable Universal Life Insurance because this type of policy uniquely combines the flexibility of universal life insurance with the investment component found in variable life insurance.

In a Variable Universal Life Insurance policy, policyholders benefit from a monthly mortality charge, which covers the cost of the death benefit. This is a standard feature in many life insurance products, but what truly sets Variable Universal Life apart is the ability for policyholders to make self-directed investment choices. They can allocate their premiums among a range of investment options, such as stocks, bonds, and mutual funds, allowing for potential growth in the cash value component based on market performance.

This investment component adds a level of risk and reward not present in whole life insurance, which typically offers a guaranteed death benefit and sets cash value growth. Additionally, while universal life insurance also provides flexibility with premiums and death benefits, it does not allow the same variable investment options as the Variable Universal Life policy. Lastly, term life insurance provides only temporary coverage with no cash value accumulation or investment opportunities, making it a fundamentally different product.

Thus, Variable Universal Life Insurance is characterized by both the mortality charge and the self-directed investment options, making it the correct answer.