While this word is where we get the word zoo, the Bible uses it to speak of the highest life. Zoe is translated as eternal life and the life of God. In order to contrast the difference, we can see the two words in the same verse. Zoe is used 120 times in the New Testament to speak of the higher life. Psuche is the word we get psychology from.
Psychology is the study of the soul.
It deals with those things that we lay down in order to gain life eternal. It was Jesus' soul life that He laid down and not spiritual Life. Once we receive eternal life, we do not give that up because it is the Life of God. When Jesus laid down His psuche the veil was torn from top to bottom. This shows the action was from God's initiative.