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This is my favorite type of life insurance, because it combines the cheap-ass features of Term Insurance with the conservative, equity-building features of Whole Life insurance.

When you buy this product, you are betting on the Money Market. The rate of return on your premium dollar right now is around 6%. The guaranteed rate of return, no matter what happens to the economy, is usually 4%. When Jimmy Carter was President, these policies were paying around 12%. So you see how it can go.

But it's the flexibility that appeals to me. You can pay as much as you want for the coverage, if you stay within tax guidelines, to build up as much future equity as you like. You can adjust the death benefit to fit your current situation. (What, the kids have moved out? Par-taay, par-taay!) And you can withdraw your equity just like from a savings account at the bank. Of course, you don't want to do this unless it's an emergency, such as saving the wee turtles.

But it's just good to know that you own some property with your life insurance. Do you rent your house? Even if you do, there's no need to ret your insurance.

During my first co-op work term, I wrote a Universal Life policy illustration program in BASIC for the WANG Personal Computer (an IBM compatible). This was for a Canadian insurance company who shall remain nameless. I worked in their U.S. individual policy section. At this time, in the early 80s, interest rates were very high. 20%. The program naturally showed that in just a few short years, your initial premium payments would carry the policy.

Now, it happens that interest rates plummeted a while after, and all of the nice people who had purchased Universal Life policies found that the darn things did not, in fact, carry themselves after all.

Eventually, several U.S. states, including Texas, sued the nameless Canadian insurance company. The company had, meanwhile, changed offices from one province to another. They claimed that all records of the policy creation from that time had been lost in the move. I saw this last part on 60 minutes or maybe The Fifth Estate.

Now it just so happens that I'm pretty darn sure my name appears in the comments for the source code of the illustration program. And from time to time I wonder ... what if someone finds it ... and it turns out I'm the only one who can be linked to it in any way.

Will Texan bounty hunters come and kidnap me and drag me to Texas in a burlap sack?

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