What is a key characteristic of variable universal life insurance?

A key characteristic of variable universal life insurance is the ability to allocate premiums into various investment subaccounts. This flexibility allows policyholders to choose how their cash value is invested, depending on their risk tolerance and investment goals. The investment subaccounts typically include options such as stocks, bonds, and other investment vehicles, which can fluctuate in value based on market performance.

This feature differentiates variable universal life insurance from other products such as whole life insurance, which generally offers a fixed death benefit and cash value growth. The ability to adjust the investment strategy is particularly appealing for individuals seeking more control over their policy's performance and growth potential. Additionally, the cash value accumulation is not guaranteed and varies with the performance of the selected subaccounts, offering the potential for higher returns compared to more conservative life insurance products.