which makes it more expensive than UL, which despite your inaccurate claim is designed to have a cash value of zero, has all the same tax advantages of the cashflow management you mentioned in your earlier post. A guarantee issued by the company to the policyholder is effectively saying to them "if you want added security with these guarantees, it's going to cost you."

Here are several of the reasons WL is more expensive than UL:

1. Investment options - insurance companies will be much more conservative with their asset matching of those liabilities since the cash values are guaranteed for life. As a result the implied investment yield, as made manifest through the guaranteed cash value schedule, is AT BEST the same minimum interest rate guarantee you can get with a universal life policy.

2. Expenses - companies must make more conservative assumptions about policy administrative expenses (i.e. they assume it will be more expensive), since they are guaranteed for life

3. Mortality - companies must make more conservative assumptions about mortality expenses (i.e. they assume it will be more expensive), since they are based on assumptions that will not change in response to the actual mortality experience of the block.

4. Reserves - the added level of guarantees requires a higher level of reserving by the insurance company; that added cost is passed on to the consumer.

5. Current versus guaranteed scales - UL has current costs, which can change to reflect actual experience, but are contractually limited to guaranteed maximums. Sometimes, that flexibility actually allows the costs to the policyholder to decrease as a reflection of favorable experience and a desire of the insurance company to remain competitive. This is especially the case with investment portfolio performance, but I've seen it happen with expenses and mortality as well.

Bottom line, the reduced product flexibility of WL compared to UL makes WL a less competitive product in virtually every instance. I've worked for four insurance companies that all haven't developed any whole life products in the last 10 years for that simple reason: UL can do everything WL can and do it better. A lot of the advantages of WL (particularly single premium whole life) died off with the DEFRA/TAMRA legislation of the 1980s.

The only companies still selling WL are mutual life insurance companies, and if you haven't noticed, there have been numerous demutualizations in the industry in the last few years (of which I've worked on a couple).

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Disclaimer: This post contains a secret agenda.