Insurance companies sold products called universal life insurance policies that were supposed to provide life insurance for your entire life in the late 80’s and 90’s. The reality is that these kinds of insurance policies were poorly designed and many lapsed because the policies did not perform well as interest rates decreased and customers were forced to send extra premiums or the policy lapsed. The universal life policies were a hybrid of policies for term insurance and entire life insurance. Some of these policies were linked to the stock market and were known as universal life insurance policies that were variable. My thoughts are that only investors that have a high-risk tolerance should purchase variable policies. The policy owner will lose big when the stock market goes down and be forced to send in additional premiums to cover the losses or your policy will lapse or terminate.In recent years, the design of the universal life policy has undergone a major change for the better. Universal life policies are permanent policies that range from as high as 120 years of age. Learn more about them at https://www.inreads.com/managing-your-business-resources-acquiring-key-man-life-insurance/
Most life insurance providers currently sell primarily term and general life policies. Universal life strategies now have a target premium that has a guarantee that the policy will not expire as long as the premiums are paid. The most recent type of universal life insurance is the indexed universal life policy linked to the S&P Index, the Russell Index and the Dow Jones performance. You generally have no gain in a down market, but you do not lose the policy either. If the market is up, you can make a profit, but it is restricted. If the index market loses 30 percent, then you have what we call the floor, which is 0, which means that you do not lose, but there is no profit.