Whole Life Insurance is probably the most expensive form of life insurance, as far as premium outlay.  Whole life insurance provides insurance protection for the life of the contract.  All whole life policies build cash value and some pay dividends, but not all do.  The cash value build up inside a whole life insurance policy is yours and may be used to supplement retirement or pay college expenses or for any other need.  Withdrawal of cash values will more than likely reduce the amount payable at the death of the insured.  Please keep in mind that the primary reason to buy life insurance is need for protection and not cash value.

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Universal Life Insurance is an interest-sensitive flexible type of life insurance.  You may adjust the premiums and/or death benefit to fit your particular situation, within policy limits.  The net premium of a universal life insurance policy is deposited into an interest bearing "accumulation" fund, then the actual cost of the death benefit and any policy administration fees are deducted from this fund.  The remainder remains in the "accumulation" fund.  The problem with universal life is that in some cases the policy has been "underfunded", that is, the premium payment is less than the cost of the insurance and administration fees, so the accumulation fund, in this case, could be exhausted and at that point the policy would terminate or additional funds would be required to be paid into the insurance policy.  If you purchase a universal life insurance policy, make sure that it is properly funded at the beginning.

Interest rates in a universal life policy are subject to change, but should never fall below a guaranteed rate stated in your particular insurance policy.

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If your "risk tolerance" is higher than normal, then a Variable Universal Life Insurance Policy may be right for you.

The cash value accumulation of a variable universal life policy is invested in various funding options which invest in things like stocks and bonds.  You make the decision as to how your policy values are invested and you bear the investment risk.

The death benefit of a variable universal life insurance policy may decrease and/or you may be required to pay a higher insurance premium if market performance is poor.

On the other hand, your cash value has the potential of growing more rapidly than any other form of permanent life insurance if the market performs well.

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