Universal Life Insurance

Insurance

Universal life insurance is permanent coverage with flexible premiums and a cash value component invested in market-linked or fixed accounts. Variants: indexed universal life (cash value tied to index performance with caps), variable universal life (cash value invested in subaccounts). Marketing emphasizes flexibility and 'investment growth,' but high fees (1.5-3% annually), surrender charges, and complex policy mechanics make these among the worst pure investment vehicles. Universal life policies can lapse if cash value depletes — premiums often need increases later. Skip universal life unless specifically recommended by a fee-only fiduciary for narrow estate-planning purposes.