Personally, I'd stay away from any and all universal life policies. They're typically loaded with fees and the cost of insurance is WAY more expensive than a simple term life policy.
I actually bought a universal life policy back when I had a financial "advisor" (eventually learned he was really just a salesman). I was 25 at the time of purchase and paid $150 per month for $400,000 coverage. If I recall, the actual insurance cost was in the neighborhood of $80-$90 per month. The rest was just to build cash value in the policy.
A few years later, I noticed of my $150 contribution:
- $6 was immediately lost to policy fees
- ~$4 was then lost to pay the loads on the (terribly performing) mutual funds
I then fired the advisor, signed-up for a $1M 30-yr term policy that costs me less than $60 per month and surrendered the universal policy and lost the $2,700 cash value to the surrender charge. I decided it was time to stop throwing good money after bad.
Definitely check out a site like term4sale.com to get an idea of how much cheaper a term policy is and take a stab on figuring out your returns if you invest the premium difference every month.
