Is Universal Life Insurance A Tax Shelter? 
Universal Life Insurance can be a tax advantaged saving or investment product that can accumulate tax deferred and generate tax free distributions via withdrawals to basis after 15 years and/or policy loans of gain . However , the policy must be kept in force for the life of the insured or all policy loans of gain and internal policy loans will re-characterize as phantom income and taxed as ordinary income in the year of lapse or termination . 