You're right to be skeptical. And NO, it's typically not a good retirement plan. Keep your life insurance and retirement needs separate. Life insurance is designed to provide for a lump sum to your family/beneficiaries; when there is an economic loss or need as a result of your premature and untimely death. Term insurance is cost-effective, and can provide for this need, when the time comes. One could argue some permanent insurance, like whole life or universal, could be prudent, to pay for a final illness and burial needs. Retirement options abound! A 401k, for example, can provide three potential benefits: (1) it's automatic, so the money gets put away whether you remember to fund it, or not; (2) you get a tax deduction, reducing your tax bill, and (3) there will likely be a company "match," providing you with more dollars towards retirement. In my 25-plus years in the biz, I've never seen a VUL policy work out like the original illustration. Ask the agent to run it based on the last 10 years, at 0%, instead of the hypothetical rate he or she chose, and you'll see how horrible the results are. The expenses are just too high. Hope that helps. PLEASE VOTE to avoid a TIE. On behalf of all of your responders, who take the time and effort to help questioners in this free Yahoo! community, THANK YOU in advance for taking the time to choose your "Best" Answer. We really appreciate it. DISCLAIMER: While the information in this response was obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. The opinion voiced in this answer is for general information only and it shall not be construed as tax, legal, or investment advice for any individual. Questioners are urged to consult with their professional advisers before making any decisions regarding their finances. RetirementGuru, CFP®, EA, BCE, AAMS Certified Financial Planner™ Practitioner Enrolled Agent | Admitted to Practice before the IRS 'Providing sound Retirement and Estate Planning Strategies since 1985'