If you answer "yes" to the questions below, you might benefit from variable universal life (VUL). If you answer with a series of "no's", there are probably better ways for you to insure your family and invest your money.

1. Do you need more life insurance? That's the price you have to pay to get into this tax shelter.
2. Will you keep the policy in force for the rest of your life? Cash in a VUL policy and you'll owe tax on any investment gains.
3. Can you afford to "overfund" the policy? VUL's tax shelter really begins to pay off when you put in far more cash than what's required.
4. Have you made the most of other tax-favored retirement investments? A 401(k) or IRA delivers the benefits of tax deferral without the added cost of insurance.
5. Do you plan to borrow money from the policy? If you just need the insurance, simple term life can give you the same death benefit for a fraction of the cost.
6. Will it be at least ten years before you need the money? That may be the earliest date your cash value will equal the amount of money you have paid in. Many advisors recommend waiting 20 years before pulling any money out of a VUL (or other cash value) policy.
7. Are you in good health? If not, the high cost of insurance may overshadow the tax advantages.
8. Are you willing to monitor your investments closely? If the cash value shrinks, the policy could laps and leave you with a nasty tax bill.
9. Are you an aggressive investor? You'll benefit most from VUL's tax shelter if you shoot for high-profit stocks and trade frequently.