This is one I have some personal experience with - -
It MAY be worth it for you, but it may not. I was in a similar position about a decade ago, and bought one. I did a lot of analysis, and while it has underperformed my expectations, it has generally been OK, compared to the alternatives. My belief is that it's a rare and tiny group of people that can really benefit from it (mainly those already maxing out their other retirement savings sources).
First, and most importantly, if you don't actually need or want the life insurance portion, I'd stay away. In my case, I wanted a million of permanent coverage to be in effect through retirement, as my term life was going to run out at some point (after your level term period, the premiums skyrocket, and it's only worth keeping if you're terminal, or in VERY poor health). So, I got the universal indexed life, and selected the increasing death benefit option (every year your cash value increase is added to the million initial coverage amount). I maxed out premiums for 7 years (can't go over a certain calculated amount, or the IRS will consider it an investment, and not life insurance), and now pay nothing in premiums (it is guaranteed to never lapse or be canceled).
Bottom line, I have in effect been getting "free" insurance coverage and a decent rate of return on the cash value over the past decade. My death benefit is now over $1.45 million, and my cash value is $450k. The return has been more in the 3-5% range than the 8-10% that was projected before purchase (which I never believed would happen). I expected 5-6%ish, so it's kind of in the ballpark, but a bit short. Please understand, the past decade has been a pretty exceptional return environment, so it may get worse from here for me, and may be worse from the get-go for you.
It is true that your cash value is guaranteed to be growing at least 0%. So, it's safe from that perspective. There is a cost for this - - depending on your policy, it is usually due to a cap on the maximum returns, or a "participation rate" where you only get a percentage (40-60% in my case - it adjusts from time to time) of the returns of the index(es) involved. It can also use both of these limitations (mine does).
The other big gotcha is that you have to want to keep this thing a LOOOONG time. "Surrender charges" are assessed for the first 7-10 years of the contract, if you want to cash it in. It's a declining percentage, like 7-8% the first year grading down to 0 over time. This is mainly to cover the commissions your salesperson earns on the sale. I wish there was a "no-load" version, but I must admit that this vehicle requires a LOT of explanation to even a financially sophisticated buyer, which a good salesperson will do. A bad salesperson will just tell you to look at the "illustrated rate (the 8-10% mentioned earlier) and tell you it's a no-brainer.
Most policies link to the S&P 500 Index, which is just fine. I went for an even more exotic flavor, and have a global index method. I have 3 indexes in the policy - the S&P, the EuroStoxx Index, and the Hang Seng Index. Every 1-5 years, I get 75% of the highest performer, 25% of the next highest, and they drop the lowest performer. This is once again paid for by haircutting the return, or putting a cap on it (frustratingly, this is all at the whim of the insurance company each year). In hindsight, I would have been better off with just the S&P, but this may change in the future (who knows?). It is definitely unnecessarily complex, but since my main use was for supplemental retirement income and the life insurance, I was OK with a bit more risk (and complexity).
The policies are INITIALLY reviewed and approved by the state insurance departments, but there is really no decent "ins-and-outs" financial summary routinely provided for the policy - - life insurance companies are not good with customer-friendly annual statements (and you usually can't get any decent interim info until the next annual report). So, you are taking it a bit on faith that they will calculate everything appropriately (with your only recourse being to file a complaint with the state insurance department).
I don't regret my purchase, but I think you should go into it with your eyes wide open, do your due diligence, and ask as many people about it as possible before deciding to take the plunge.
