dd564
Recycles dryer sheets
So my aunt by marriage is a financial advisor, and she knows I like to do my own thing, but she's always big on promoting her products. I like to debate with her on things. This one was about VUL.
She is pro VUL.
I say buy term Life Insurance, invest the difference.
I say, "we invest on a 20 year term which brings my kids age to mid twenties, and then I really shouldn't need life insurance".
She says, "yes but you have nothing left then".
I say, "I don't need it then, plus I have the investments yet".
She says, "okay, but it's not tax-free tax deferred".
I say,
"If I am maxing out my IRA's / 401k's, some of that will be an it's completely liquid incase if I want to move it to a different investment. (real estate etc)."
She then says that the another reason is that life insurance policies won't go through probate or be taxed upon death.
At this point we are getting into the 'I don't know enough' to debate standpoint and just listen.
She implies that VUL's can be good from an estate planning standpoint because it won't go through probate or be taxed upon death at 40-50%.
The argument is essentially move money to a VUL, and it will go to your heirs tax free (or a much lower tax rate). That it by-passes state estate taxes.
Is this true?
She is pro VUL.
I say buy term Life Insurance, invest the difference.
I say, "we invest on a 20 year term which brings my kids age to mid twenties, and then I really shouldn't need life insurance".
She says, "yes but you have nothing left then".
I say, "I don't need it then, plus I have the investments yet".
She says, "okay, but it's not tax-free tax deferred".
I say,
"If I am maxing out my IRA's / 401k's, some of that will be an it's completely liquid incase if I want to move it to a different investment. (real estate etc)."
She then says that the another reason is that life insurance policies won't go through probate or be taxed upon death.
At this point we are getting into the 'I don't know enough' to debate standpoint and just listen.
She implies that VUL's can be good from an estate planning standpoint because it won't go through probate or be taxed upon death at 40-50%.
The argument is essentially move money to a VUL, and it will go to your heirs tax free (or a much lower tax rate). That it by-passes state estate taxes.
Is this true?