Variable Universal Life Insurance (VUL)
Investing Directly in the Market Through Life Insurance
My friend, a finance bro, wanted life insurance that worked like his brokerage account. He found it in Variable Universal Life (VUL). A VUL policy lets you take your cash value and invest it directly into “subaccounts,” which are essentially mutual funds offered by the insurer. He can invest in a growth stock fund, an international fund, or a bond fund, all inside his life insurance policy. He gets the full upside potential of the market, but also accepts the full downside risk. It’s the most aggressive form of permanent life insurance you can buy.
The High Growth Potential (and High Risk) of Variable Universal Life
The Glass Cannon of Life Insurance
I call VUL the “glass cannon” of life insurance. It has the highest potential for explosive growth. If you pick the right subaccounts and the market booms, your cash value could grow by 15% or 20% in a single year, far outpacing other types of policies. However, it’s a double-edged sword. If the market crashes, your cash value takes the full hit, minus fees. A 20% market drop means your cash value drops by 20%, plus fees. It offers the biggest rewards but also carries the most significant risk of your policy imploding.
Understanding VUL Subaccounts: Like Mutual Funds Inside Insurance
Your Personal Investment Menu
When my colleague showed me his VUL statement, it looked just like his 401(k) selection page. He had a menu of about 50 different “subaccounts.” These are the investment options for your cash value, and they mirror well-known mutual funds, from conservative government bond funds to aggressive emerging market stock funds. He had allocated his cash value 60% to a U.S. large-cap stock subaccount and 40% to an international stock subaccount. You are in the driver’s seat, building and managing your own investment portfolio inside the insurance wrapper.
VUL Fees Explained: M&E, Admin, Fund Expenses, Surrender Charges
The Four Layers of Cost You Must Overcome
VUL policies have more layers of fees than any other life insurance. First, you have the standard Mortality & Expense (M&E) and administrative charges for the insurance itself. Second, you have the fees for the actual investment subaccounts you choose, just like mutual fund expense ratios. Third, you have surrender charges if you cash out early. These combined fees create a high hurdle. Your investments must perform well enough to clear all these costs before you see any positive growth. If your funds return 6% but fees are 3%, your net return is only 3%.
Is VUL Only Suitable for Sophisticated Investors?
Yes, This Is Not a Product for Beginners
Absolutely. VUL is a complex product designed for individuals who are comfortable with direct market risk and actively managing an investment portfolio. You need to understand asset allocation, risk tolerance, and how to analyze investment options. If you don’t know the difference between a growth fund and a value fund, or if you’re the type to panic-sell during a market dip, a VUL is not for you. It’s a high-maintenance product that demands a significant level of financial sophistication and emotional discipline from the owner.
VUL vs. IUL: Which Offers Better Growth Potential?
Uncapped Growth vs. Capped but Protected Growth
The choice between VUL and IUL is a choice between uncapped potential and protected potential. With an IUL, your best-case scenario in a great market year might be a 9% gain due to caps. With a VUL, if you’re in the right subaccount and the market soars 30%, you get the full 30% (minus fees). The growth potential of VUL is theoretically unlimited. However, when the market drops 20%, the IUL gets 0%, while the VUL gets a real loss of -20%. VUL offers a higher ceiling, but IUL offers a floor.
Managing Market Risk Within Your VUL Policy
Asset Allocation is Your Best Defense
Just because you have a VUL doesn’t mean you have to go all-in on aggressive stocks. You manage risk inside a VUL the same way you do in your 401(k): through asset allocation. My risk-averse friend has a VUL but keeps 60% of his cash value in bond and fixed-income subaccounts and only 40% in stock subaccounts. This mutes his potential returns but also dampens the volatility. You have the control to create a conservative, moderate, or aggressive portfolio that matches your personal risk tolerance.
How a Market Crash Could Destroy Your VUL Policy Value
The Double Whammy of Losses and Costs
Here’s the nightmare scenario for a VUL owner. The market crashes 30%, so your cash value takes a 30% hit. On top of that, the policy’s monthly cost of insurance and administrative fees are still deducted from your now-depleted cash value. This is a dangerous double whammy. The investment loss reduces your policy’s fuel tank, and the ongoing costs continue to drain it. If this is followed by another down year, the policy can quickly run out of cash value and lapse, leaving you with nothing. This is the central risk of a VUL.
Using VUL for Tax-Advantaged Wealth Accumulation
A Roth Alternative on Steroids (with More Risk)
A high-income surgeon I know uses a VUL as a wealth accumulation tool. He’s maxed out all other retirement accounts. He aggressively funds his VUL, allocating the cash to growth-oriented subaccounts. His goal is to achieve decades of tax-deferred, market-like growth. When he retires, he’ll take tax-free loans against the large cash value to supplement his income. It’s a strategy to create a massive bucket of tax-free money, but he fully understands he is taking on market risk to achieve it, something he’s comfortable with.
VUL Illustrations: Projecting Investment Returns (Use Extreme Caution)
The Most Hypothetical of All Illustrations
VUL illustrations are pure fiction, but they can be useful fictions. They will show you projections based on a hypothetical gross return, like 0%, 6%, and 10%. It is critical to understand these are not predictions. The illustration’s main job is to show you how the policy would function if you achieved those returns. Pay close attention to the 0% return column. This shows you how quickly the policy costs will eat your cash value if your investments go nowhere. Never, ever mistake a VUL illustration for a forecast of future performance.
Comparing VUL Subaccount Performance and Fees
Look Under the Hood Before You Invest
When my friend was choosing a VUL, he didn’t just look at the policy. He asked for the performance history and expense ratios of the subaccounts offered. One company offered subaccounts that mirrored low-cost Vanguard funds, with expense ratios around 0.20%. Another company’s options were from a higher-cost manager, with fees closer to 1.00%. Over 30 years, that difference in internal fund fees can have a massive impact on your net returns. It’s crucial to analyze the investment options themselves, not just the insurance wrapper around them.
Does VUL Make Sense When You Can Invest Directly?
The Case for the Tax Wrapper
A friend asked, “Why not just buy term insurance and invest in a regular brokerage account?” It’s a valid question. The case for VUL boils down to taxes. In a brokerage account, you pay taxes on dividends and capital gains each year. In a VUL, all your growth is tax-deferred. More importantly, you can access the gains via tax-free loans, which you can’t do with a brokerage account. And finally, the death benefit is tax-free. For a high-income, tax-sensitive investor who needs life insurance anyway, these tax advantages can sometimes outweigh the higher fees.
The Importance of Actively Managing Your VUL Investments
Set It and Forget It Is Not an Option
A VUL is not a slow cooker; it’s a chef’s kitchen that requires a skilled, attentive cook. You can’t just pick some subaccounts on day one and ignore them for 20 years. You need to monitor your investments, rebalance your portfolio periodically, and make sure your asset allocation remains aligned with your goals and risk tolerance. If you are not the type of person who actively enjoys managing an investment portfolio, you should not own a VUL. It is a product that demands active, ongoing participation from its owner.
VUL Loans and Withdrawals: Tax Implications and Risks
Accessing Your Cash, But Be Careful
With a VUL, you can access your cash value through withdrawals up to your cost basis (what you’ve paid in) or through loans. Loans are generally tax-free, but they accrue interest and reduce your death benefit. Withdrawals are tax-free up to your basis, but gains above that are taxable. The big risk? If you take large loans and your policy’s cash value plummets in a market crash, the policy could lapse. A lapsed policy with an outstanding loan can trigger a massive, unexpected tax bill. Accessing cash is easy, but it must be done with extreme care.
When Might VUL Be a Better Choice Than Whole Life or UL?
For the Long-Term, Risk-Tolerant Investor
A VUL might be the right choice for a young professional with a long time horizon (30+ years) and a high risk tolerance. If you believe in the long-term growth of the stock market and are willing to ride out the downturns, a VUL gives you the potential to accumulate far more cash value than a Whole Life or IUL policy. It’s for the person who wants permanent insurance but feels that the guaranteed but low returns of other products are too conservative for their taste.
The Flexibility of VUL: Adjusting Premiums and Death Benefits
A Key Feature Shared with Other UL Products
Like its Universal Life cousins, VUL offers valuable flexibility. My friend, who owns a VUL, can increase or decrease his premium payments within certain limits. When he got a big bonus, he made a large lump-sum payment to boost his investment funds. When he was between jobs for a few months, he paid a lower premium. This ability to adjust funding based on your life’s circumstances, combined with the power of market investing, is a core feature of the VUL chassis. You can also apply to increase or decrease the death benefit as your needs change.
Can You Lose Your Entire Premium in a VUL? Yes.
The Worst-Case Scenario is a Total Loss
This is the brutal truth of VUL. Let’s say you pay $5,000 in premiums. You invest in an aggressive subaccount, and the market crashes 50%. Your $5,000 is now worth $2,500. Then, the policy deducts its annual fees of $1,000. Your cash value is now $1,500. If this happens for a couple of years in a row, it is entirely possible for your cash value to be completely wiped out by the combination of investment losses and ongoing fees. In this scenario, your policy lapses, and you have lost 100% of the money you paid in.
VUL Riders: Adding Guarantees (at a Cost)
Bolting a Safety Net onto a Risky Chassis
Because VULs are so risky, many insurers now offer riders to add a layer of protection. My colleague’s VUL has a “Guaranteed Minimum Death Benefit” rider. For an additional fee, it guarantees that as long as he pays a certain premium, the policy’s death benefit will never lapse, even if the cash value goes to zero due to market losses. These riders are expensive and can be a significant drag on your investment returns, but they can provide peace of mind by adding a small piece of certainty to an otherwise uncertain product.
Understanding the Prospectus for a VUL Policy
The Legal Document You Should Actually Read
When you buy a stock or mutual fund, you get a prospectus. Because VUL involves securities (the subaccounts), it also comes with a thick prospectus. This document is your best friend for uncovering the truth about the policy. It legally must disclose all the fees, charges, risks, and details of the investment subaccounts. While your agent gives you a glossy brochure, the prospectus gives you the unvarnished facts. It’s dense and legalistic, but spending an hour with it can save you from making a huge mistake.
VUL for High-Net-Worth Individuals Seeking Tax Deferral
A Private Investment Account with an Insurance Wrapper
For my high-net-worth clients who have maxed out every other tax-advantaged account (401k, Roth, HSA), a VUL can serve a specific purpose. It essentially acts as a private, unlimited investment account where all growth is tax-deferred. They can allocate significant capital to a diverse range of subaccounts and not worry about paying taxes on capital gains or dividends each year. The life insurance component is secondary to the goal of long-term, tax-sheltered wealth accumulation. It’s a sophisticated tool for tax management.
Is VUL Subject to SEC Regulation? Yes.
The Reason for the Prospectus
Unlike Whole Life or IUL, which are regulated solely by state insurance commissioners, Variable Universal Life is also regulated by the Securities and Exchange Commission (SEC) and FINRA. This is because you are investing in securities (the subaccounts). This dual regulation means VULs have stricter disclosure requirements. It’s why you get a prospectus detailing fees and risks, and why the person selling it must have not only an insurance license but also securities licenses (like the Series 6 or 7). It’s a sign of the product’s inherent investment risk.
The History of VUL: Combining Insurance and Investments
A Product of the 80s Bull Market
VUL was born in the 1980s, a time of soaring stock market returns and financial deregulation. The idea was simple: why should life insurance cash value be stuck in low-yielding bonds when the stock market was booming? VUL was created to give policyholders direct access to market returns within a tax-advantaged insurance structure. It appealed to the new generation of yuppie investors who were comfortable with market risk and wanted more control. It represents the ultimate merger of the insurance and investment worlds.
How Do VUL Policy Costs Compare to Other Permanent Life Options?
The Highest Potential Fees of All
Generally, VUL policies have the highest potential all-in costs. You have the same basic insurance costs as a Universal Life policy, but then you have an additional layer of fees: the investment management fees for the subaccounts you choose. A typical UL policy might have costs of 1-2%. A VUL could have those same costs plus another 0.5% to 1.5% in fund-related fees, bringing the total annual drag on your returns to 2-3% or more. This high fee hurdle means your investments have to perform that much better just to break even.
Surrendering Your VUL Policy: Timing Matters
Cashing Out in a Down Market Can Lock in Losses
If you decide to surrender your VUL policy, not only do you have to worry about surrender charges, but you also have to worry about the market’s performance. My friend’s uncle decided to surrender his VUL in late 2008, at the bottom of the market crash. His cash value had already fallen 40%. By surrendering then, he permanently locked in those huge losses. If he had been able to wait a year or two for the market to recover, his surrender value would have been significantly higher. Cashing out a VUL requires tactical timing.
Can You Switch Subaccounts Within Your VUL Policy Tax-Free?
Yes, This Is a Key Advantage
This is one of the most powerful features of a VUL. Let’s say you have $100,000 of cash value, with $50,000 of it being growth. In a regular brokerage account, if you wanted to sell your U.S. stock fund and buy an international fund, you would trigger a capital gains tax on the growth. Inside a VUL, you can make that same switch—rebalancing your portfolio, moving between subaccounts—and it is all done on a tax-free basis. This allows you to manage your portfolio much more efficiently over time, without worrying about the tax consequences of every move.
Monitoring Your VUL Policy Performance: A Crucial Task
Your Quarterly Statement Is Your Wake-Up Call
Unlike other policies that you might review annually, a VUL requires more frequent attention. You should be looking at your quarterly statement just as you do with your 401(k) or brokerage account. You need to track the performance of your chosen subaccounts, compare them to their benchmarks, and assess whether your cash value is growing enough to sustain the policy’s long-term costs. Ignoring a VUL for a year or more, especially in a volatile market, is a form of financial malpractice.
VUL vs. Buying Term and Investing the Difference: The VUL Case
An Argument for the Tax-Savvy and Disciplined
The “buy term and invest the difference” argument is powerful. However, the case for VUL rests on a few key points for a specific type of person. First, it assumes you are already maxing out all other tax-advantaged accounts. Second, it leverages the tax-free internal transfers and tax-free access via loans, which a brokerage account doesn’t offer. For a high-income, tax-sensitive person who is disciplined enough to max-fund the policy and manage the investments, the long-term tax advantages of the VUL structure can potentially outperform the “buy term and invest” strategy on an after-tax basis.
Using VUL in Advanced Estate Planning Strategies
A Growth Engine Inside a Trust
For wealthy individuals, placing a VUL inside an Irrevocable Life Insurance Trust (ILIT) can be a powerful estate planning move. The goal is often to grow the assets inside the trust as much as possible, so the eventual death benefit is large enough to handle estate taxes. By using a VUL, they are choosing a growth-oriented engine for the trust’s main asset. They are willing to take on market risk inside the trust in exchange for the potential of a much larger tax-free payout to their heirs down the road.
How VUL Can Complement Your Existing Investment Portfolio
A Tax-Advantaged Satellite Position
I advise my clients to think of a VUL not as a core holding, but as a “satellite” position in their overall financial plan. Your 401(k) and brokerage account are your core. A VUL can be a smaller, complementary piece used for a specific purpose: long-term, tax-deferred growth. Because its gains are not correlated with taxes in your other accounts, it can be a good diversifier. You can let it grow aggressively for decades, knowing it’s a bucket of money you can access later in life on a potentially tax-free basis.
The Minimum Death Benefit Guarantee in Some VUL Policies
An Expensive but Potentially Policy-Saving Rider
Some VUL policies offer a rider that guarantees the policy will not lapse as long as a specified premium is paid, even if the cash value goes to zero. This “no-lapse guarantee” essentially turns the VUL into a Guaranteed Universal Life (GUL) policy. It sounds great, but this rider is very expensive, and the fees are a significant drag on your investment performance. You are sacrificing a lot of growth potential in exchange for that safety net. It’s a trade-off between the core purpose of a VUL (growth) and the desire for security.
Getting VUL Insurance: The Underwriting Process
The Same Scrutiny as Other Policies
Despite its focus on investments, a VUL is still life insurance, and you have to medically qualify for it. The underwriting process is just as rigorous as for any other policy. You’ll need to complete a detailed application, answer health questions, and almost certainly undergo a medical exam with blood and urine tests. The insurance company will assess your health and lifestyle to determine your risk class, which in turn determines the cost of insurance inside your policy. Being an investment whiz doesn’t help you if you can’t pass the medical underwriting.
What Kind of Investor Profile Fits VUL?
Young, High-Income, High Risk Tolerance, and Long-Term
The ideal candidate for a VUL is a young professional, perhaps in their late 20s or 30s, with a high and stable income. They should have a high tolerance for investment risk and be comfortable with market volatility. They must have a long time horizon (30+ years) to ride out market cycles. Finally, they should already be maximizing their traditional retirement accounts like a 401(k) and Roth IRA. A VUL is a supplemental tool for this specific profile, not a foundational product for the average investor.
Are VUL Fees Tax Deductible? No.
A Common Misconception
A friend asked me if he could deduct the fees from his VUL on his tax return since they were investment-related. The answer is a clear no. While the growth inside a VUL is tax-deferred, the premiums and internal costs are considered personal insurance expenses and are not tax-deductible. This is an important factor when comparing a VUL to other investments. The management fees in a non-retirement brokerage account, for example, may be deductible in some situations, but the costs associated with a VUL are not.
The Impact of Inflation on VUL Investments
Your Investments Must Outpace Both Fees and Inflation
Inflation is a hurdle for any investment, and a VUL is no exception. If your subaccounts return 7% in a year, but fees are 2% and inflation is 3%, your “real” return is only 2%. Because VULs have a higher fee structure than direct investments, the bar for achieving a positive real return is higher. You are not just trying to beat inflation; you are trying to generate enough growth to overcome the policy’s internal costs and the eroding effect of inflation. This underscores the need for strong, long-term investment performance.
My Experience Analyzing a VUL Policy Statement
A Deep Dive into the Numbers
I recently helped a friend analyze his 5-year-old VUL statement. It was an eye-opener. His chosen subaccounts had a gross return of 8% for the year, which looked great. But when we dug deeper, we saw that after all the various policy fees and charges were deducted, the net increase in his cash value was only 5.5%. It was a stark lesson that in a VUL, the headline investment return is never the number that ends up in your pocket. You have to subtract the multiple layers of costs to find your true net growth.
Common Mistakes People Make When Buying VUL
Underfunding, Misunderstanding Risk, and Ignoring It
The three most common mistakes I see with VULs are a recipe for disaster. First, people underfund them. They pay a low premium that is quickly eaten up by fees and market dips. Second, they don’t truly understand or respect the market risk, and they panic when their cash value drops. Third, they buy it and then ignore it, failing to actively manage the investments. A VUL that is underfunded, misunderstood, and ignored is almost guaranteed to fail over the long run.
Is VUL Transparent Enough About Its Costs and Risks?
Legally, Yes. In Practice, Often No.
Legally, thanks to SEC regulations, all the costs and risks of a VUL must be disclosed in the prospectus. So, in theory, it is transparent. In practice, however, these are complex, 100+ page legal documents that most people never read. The sales process often glosses over the fine print in favor of a slick brochure showing rosy projections. The transparency is there if you are willing to dig for it, but it is not always presented proactively during the sales process. This puts the burden of due diligence squarely on the buyer.
How Technology is Changing VUL Products
Better Interfaces and More Investment Choices
Technology is slowly improving the VUL experience. Ten years ago, managing a VUL meant paper statements and phone calls. Today, most companies offer online portals that look and feel much like a modern brokerage website. You can track performance, view your allocations, and even execute trades between subaccounts online. Technology is also enabling companies to offer a wider and more sophisticated array of investment options, including ETFs and third-party managed portfolios, all within the VUL structure.
VUL: High Octane Growth Potential, Handle with Care
The Supercar of the Insurance World
If IUL is a sports car, then VUL is a track-ready supercar. It offers the absolute highest performance potential, with direct access to the market’s engine. But it has minimal safety features, is expensive to maintain (high fees), and requires a highly skilled driver (a sophisticated investor) to keep it from crashing. It is not a daily driver for getting groceries. It is a specialized machine designed for a specific purpose: high-speed, long-term, tax-advantaged wealth accumulation for those who can handle the ride.
Using VUL to Fund a Business Buy-Sell Agreement
A Risky Strategy for Business Owners
While some businesses use VUL to fund buy-sell agreements, it’s a risky approach. A buy-sell agreement needs to provide a predictable amount of cash at an unpredictable time. Tying that cash to the performance of the stock market introduces a huge element of uncertainty. What if a partner dies during a major market crash? The cash value in the VUL could be depleted, leaving the surviving partner without enough funds to buy out the deceased partner’s shares. For this reason, more predictable policies like Whole Life or GUL are usually a safer choice.
Can You Convert Other Policies to VUL?
Sometimes, as Part of a “1035 Exchange”
Yes, it is often possible to move the cash value from an existing life insurance policy (like Whole Life) into a new VUL policy. This is done via a “1035 Exchange,” a provision in the tax code that allows you to switch insurance or annuity contracts without triggering a taxable event on the gains. A person might do this if they have an old, sleepy policy and now have a higher risk tolerance and want to pursue market growth. However, you must be sure the potential rewards of the VUL outweigh the guarantees you are giving up.
The Role of Financial Advisors in Recommending VUL
A Huge Responsibility to Ensure Suitability
A financial advisor has an immense ethical and legal responsibility when recommending a VUL. They must conduct a thorough suitability analysis to ensure the client has the financial resources, risk tolerance, and sophistication to handle the product. Recommending a VUL to an inexperienced or risk-averse client would be a major breach of conduct. A good advisor will spend more time talking a client out of a VUL than into one, ensuring it’s only used when it’s a truly appropriate fit for the client’s specific circumstances.
VUL Death Benefit Options: Level vs. Increasing
The Same Choice as Other UL Policies
Like its UL cousins, a VUL offers two main death benefit options. Option A (or Option 1) is a level death benefit. As your cash value grows, the net amount of insurance decreases, which keeps the policy costs lower. Option B (or Option 2) is an increasing death benefit, where the payout is the face amount plus your cash value. This is more expensive because the amount of insurance remains level. Most people focused on wealth accumulation choose Option A to minimize costs and maximize cash value growth.
What if Your Chosen VUL Subaccounts Underperform?
You Have to Make a Change
This is a core part of managing a VUL. If you’ve chosen a large-cap growth subaccount and it has underperformed its benchmark for three straight years, it’s on you to take action. Just like in your 401(k), you need to analyze why it’s underperforming and decide if you should switch your allocation to a different subaccount. Unlike an IUL or Whole Life policy where the company manages the investments, in a VUL, you are the portfolio manager. Poor performance is a signal that you need to re-evaluate your choices.
The Long-Term Suitability of VUL: Does It Fit Your Goals?
A Question of Lifelong Risk Management
A VUL might seem like a great idea for a risk-tolerant 30-year-old. But will it still be suitable for that same person when they are a 65-year-old approaching retirement? As you get older, your risk tolerance typically decreases. A VUL owner needs a plan to de-risk their policy as they age, perhaps by shifting their cash value from stock subaccounts to more conservative bond subaccounts. If you are not prepared to manage the policy’s risk profile throughout your entire life, it may not be a suitable long-term solution.
VUL Asset Allocation: Strategies for Success
Mimic Your Broader Investment Philosophy
The best strategy for allocating your VUL subaccounts is to make it consistent with your overall investment philosophy. If your 401(k) is invested in a target-date fund that is 80% stocks and 20% bonds, your VUL allocation should probably look similar. Don’t treat your VUL as a “casino” account where you take wild risks while being conservative elsewhere. It should be an integrated part of your total financial picture, reflecting your well-thought-out asset allocation plan. Consistency across all your accounts is key.
Understanding VUL Mortality and Expense Risk Charges
The Price of the Insurance Wrapper
The Mortality and Expense (M&E) risk charge is a core fee in a VUL. The “mortality” part covers the risk that you might die sooner than expected, forcing the company to pay the death benefit. The “expense” part covers the company’s business costs and provides a profit margin. This fee is typically a percentage of your cash value and is deducted consistently. It’s one of the main reasons a VUL is more expensive than investing directly in mutual funds. You are paying for the tax-advantaged insurance structure that houses your investments.
Can You Max Fund a VUL Policy? (MEC Rules Apply)
Yes, and You Absolutely Should if You Buy One
Just like with other cash value policies, there is a limit on how much you can pay into a VUL before it becomes a Modified Endowment Contract (MEC) and loses some of its tax advantages. However, if you decide a VUL is right for you, you should aim to fund it as aggressively as possible, right up to that MEC limit. The high internal costs of a VUL make it very difficult for a minimally funded policy to succeed. Max funding gives your investments the best possible chance to outrun the fees and generate real growth.
VUL: For Those Comfortable with Market Risk Inside Insurance
The Final Word: Know Thyself
Ultimately, a VUL is for a very specific person: someone who looks at their life insurance and says, “I want this to be invested directly in the market, and I am willing to accept all the risks that come with that.” It is for the investor who wants to combine the tax benefits of life insurance with the growth engine of Wall Street. If that description makes you excited, a VUL might be worth exploring. If it makes you nervous, you should stay far away and stick to more predictable alternatives.