There are different types of universal life insurance policies, of which there are only two that we recommend: Guaranteed Universal Life (GUL) and Indexed Universal Life (Indexed UL).
These concepts can be difficult to understand, so we seek to explain these ideas in an intelligible manner.
A Guaranteed Universal Life (GUL) policy will last until a person is 121. It is the most affordable way to get permanent life insurance. It also builds cash value during the early years of the policy, but that amount erodes over time. The guarantee ensures that the policy never lapses, even when the cash runs out and the cost of the insurance is more than the premiums paid for the policy.
An Indexed Universal Life (Indexed UL) is a relatively new concept within the life insurance industry. It offers the same permanent protection, but the way the cash value grows is different. Growth is the result of performance, similar to indices like the S&P 500 or the NASDAQ 100. And, even though the interest is credited by the performance of an index, you are not technically invested in the financial markets. Or: An Indexed UL is not a variable policy. That means there is no downside involving stock market risk. An Indexed UL gives you a chance to have more cash value, period.