Universal Life as an investment? Canada...

[stevepa]

Quick background (skip if you want): I won a bunch of money 2 years ago (2006 PCA) and at the time knew nothing about investing. So I just talked to some financial advisers and ended up picking one after very little research/thinking. Recently I've been doing a fair bit of reading and have decided I'd be much better off investing it in index funds.

Anyways, in addition to mutual funds, some of the money is invested in a Universal Life thing. Basically it's a life insurance policy but for the first few years you put in lump sum amounts, and the excess is invested. Apparently there are tax advantages, outlined here . Basically the gains are tax free until you withdraw them, and if you don't withdraw them, they're paid out tax free to policy beneficiaries.

So pretty much it doesn't sound worth it to me. However, my (soon to be ex) financial adviser (who gains nothing from me keeping this policy) strongly advised that I keep it. Hopefully BFI can be my tiebreaker...? My options, as far as I can tell, are:

1) Cancel the policy and get the cash surrender value (basically just what I put in a year ago)
2) Keep contributing as planned.
3) Do nothing...?

Any advice is much appreciated.

Thanks,

Steve