Yes, variable universal life offers several tax advantages. Your loved ones typically would not pay federal income taxes on a payout (death benefit) they receive from your policy. Additionally, the cash value of your policy grows tax deferred, meaning you don’t owe federal taxes until you withdraw money from the policy. If you do access some of the policy’s cash value, you usually won’t pay any income taxes until you withdraw more money from the policy than you put in. In that case, your agent would need to help you to structure the policy in order to avoid overfunding it. Also, keep in mind that accessing the cash value will reduce the cash surrender value and the death benefit.