This type of universal life product allows you to allocate a portion of your premium dollars to separate accounts comprised of various sub-accounts — such as bonds and equity funds, etc. — many of which are managed by some of the top mutual fund companies in the country.
These policies usually offer no guarantees for minimum rates of return. Because of their investment risks, variable policies are considered securities contracts and are regulated under the federal securities laws. Although the risks are higher with this type of insurance policies than with the others, the rate of return is unlimited. And the returns are tax-deferred.
