It was hard to understand and it was inflexible. Insurance agents had a hard time selling these policies after they explained that the premium would always be the same but the investment returns would be impossible to predict. To deal with these issues, insurance pundits came up with universal life.
Universal life works much the same way as whole life.
The premium more than covers the requisite death benefit, and the amount that isn't used to pay expenses and mortality fees is invested. In addition, these policies allow individuals to adjust the premium and death benefit. Meanwhile, this type of policy gives you the ability to invest more money and let the cash buildup accrue on a tax-deferred basis if you like the investment returns you're earning. If, on the other hand, you aren't impressed with the investment returns, or if you simply can't afford the whole premium during a given year, you can use the cash buildup in your account to pay the mortality fees and expenses. Because a portion of the policy's cash value is likely to come from investment returns that grow on a tax-deferred basis, you can, in effect, pay for the term insurance portion of the policy with pretax dollars.