I have a VUL. To my knowledge, it is definitely not

tax-deductible. The premium you put into VUL is your after-tax money. But the gain grows in the sub-accounts of VUL is tax-defered and can be tax free. Say several years down the road, if you decide to take some money out from your cash account as a withdrawal, it will be taxed at your income tax rate at that time. However, if you take the money out as a loan, it won't be taxed. That's how you achieve "tax free". Not like 401K, you don't need to pay it back. Your loan amount will just simply be deducted from the proceeds when you die. depending on the company and the product, it may or may not be 0% interest rate on the loan. And as you may know, all the insurance proceeds are not taxable income. In another word, it will be exempted from income tax. Estate tax is a differrent story. But if you set up right, you can avoid estate tax as well. Well, it is a bit too far from your original question.