An investment product that combines the concepts of mutual-fund investing with universal life insurance. A variable universal life insurance policy allows the policy owner to invest premiums in various mutual-fund investment options known as subaccounts. The performance of these subaccounts counts toward the death benefit of the policy. Universal life insurance is unlike traditional cash-value policies (known as "whole life"). Universal life policy returns were freed from long-term, fixed-rate contracts and replaced with policies whose returns were tied to short-term interest rates and periodically adjusted. In addition, premiums and death benefits can be changed by the policyholder. Therefore, when and how much is paid in premiums is flexible.