PSI Life Exam Practice Test

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Prepare for the PSI Life Exam Test. Study using interactive flashcards and multiple-choice questions, each with detailed hints and explanations. Get exam-ready efficiently!

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Which feature is unique to variable universal life insurance?

Fixed interest rate on cash value
Right to select the investment for potential returns
Guaranteed death benefit
Tax-deferred growth of cash value

The correct answer is: Right to select the investment for potential returns

Variable universal life insurance is distinguished by its flexible investment component, allowing policyholders the right to select from a range of investment options for the cash value of their policy. This feature enables policyholders to actively manage their investments based on individual risk tolerance and financial goals, which can lead to varying returns depending on market conditions. The other features mentioned in the options do exist in other types of life insurance. For instance, many forms of life insurance may offer a fixed interest rate on the cash value or guaranteed death benefits, but these are not unique to variable universal life. Tax-deferred growth of cash value is also common across various permanent life insurance policies, thus not exclusive to variable universal life insurance.