What characterizes variable universal life insurance?

Variable universal life insurance is characterized by its combination of flexible premiums and investment components. This unique structure allows policyholders to adjust their premium payments and to allocate a portion of their cash value into various investment options, such as stocks, bonds, or mutual funds. This combination offers a dual benefit: the flexibility to adapt premiums based on financial circumstances and the potential for cash value growth linked to the performance of selected investments. This feature distinguishes it from other types of life insurance that may not provide such flexibility or investment opportunities.

The other options do not accurately capture the essence of variable universal life insurance. For instance, guaranteed fixed premiums are generally associated with whole life insurance policies rather than variable universal life. Additionally, while it can insure multiple lives, it may not be limited to a single life, and all variable universal life policies involve some level of investment risk, contrary to what the answer about not participating in investment risk suggests.