What characteristic of variable products makes them unique in terms of guarantees?

The distinguishing characteristic of variable products in the context of guarantees is that they have no guarantees and are not backed by the guaranty fund. This means that the performance of these products is tied directly to the performance of underlying investments, such as stocks and bonds, rather than being guaranteed a specific rate of return by the insurance company. As a result, policyholders face investment risk, and their returns can fluctuate based on market conditions.

This lack of guaranteed returns makes variable products more dynamic and potentially lucrative, but also inherently riskier than more traditional insurance products that do offer guarantees. This aligns with the nature of variable life insurance or variable annuities, where the value fluctuates according to the performance of the investment options selected by the policyholder. The lack of backing from a guaranty fund further emphasizes the risk involved, as there isn't a safety net to protect against investment losses in variable products.