Final answer:
The feature not associated with variable universal life insurance is 'Cash valued', as this type of insurance does include a cash value component. Flexible premiums, a variable death benefit, and the investment of cash value in sub-accounts are defining features, with death benefits structured as Option A or B.
Step-by-step explanation:
The feature that is NOT a characteristic of variable universal life insurance is 'Cash valued'. Variable universal life insurance, like any permanent life insurance, does have cash value. However, the features that definitely characterize it include flexible premiums, the ability to invest the cash value in sub-accounts similar to mutual fund investments, and variable death benefits—known as option A or B. Option A typically provides a level death benefit, while option B provides an increasing death benefit.
Actuarially fair premiums would be calculated based on the individual risk profiles, which could include family medical histories. In a scenario where the insurance company cannot assess the risk based on family cancer histories, it would have to calculate a premium that reflects the average risk of the entire group, which may be different from premiums calculated for separate groups with known family cancer histories.