What is indexed universal life insurance?

Univeral Life Insurance has an investment or cash vaule growth built into it. Unlike whole life where the "interest" is guaranteed the interest on indexed universal life it tied to and index like the S&P 500. Here is the problem - what goes up can and usually does come down. Some producst compensate for this by putting a basement on the index so that it cannot go negative. That does not mean a whole lot since all universal life products contain life insurance known as Annual Renewable Term. This is term insurance that increases in price every year. As such you will discover that at some point the money contained in your policy is not enough to pay for the insurance unless you are ready to write larger and larger checks. Confused? Never buy a financial product that makes sense to you no matter how good it sounds.