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Yikes. After reading the recent posts on VUL/UVL, I'm feeling very dumb. About 16 years ago my then employer offered Universal Life and I signed up for $40K insurance on me and $20 on my husband plus $50/mth cash contribution. I took this with me when I retired since that was the only life insurance we had on my life once I left my employer and I have been paying in as before.

Now here's where I feel dumb: I don't see anything wrong with it. I have about $14K in the cash accumulation portion which usually pays interest at a point or so above the best CD rates. The interest is not taxable and I can withdraw the cash accumulation portion whenever I like with no need to repay and with no withdrawal or surrender fees. Further there will be no income tax on the interest when withdrawn so long as it doesn't exceed my contributions to the account plus the cost of insurance. The premiums for my $40K have risen to about $37/mth and his premium is only a few dollars less but these rates compare favorably to other life insurance we have on his life.

I've even thought about increasing the cash contribution to take advantage of the tax deferred earnings.

So what am I missing??
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