Universal Life Insurance

This type of life insurance is also known as "Flexible Premium Adjustable Life Insurance". Universal life insurance is another form of whole life insurance. It has a savings component where the gains are tax-deferred. The policy works with part of your insurance premium invested into money market funds, bonds or even mortgages.

The interest rate return can increase on the accumlated cash value if the investments do well. This is because the more you make in investments, the less the insurance company has to come out of the insurance company's pockets.

Be on the look out for agents who say you can get away by only paying the minimum a month because you will most likely not build up enough value in your policy for it to be of much use and comfort.