No. of Recommendations: 1
Dave:

You've got the idea! How could your insurance salesman tell you in good faith to fund a VUL when you are getting a free 50% return on your 401(k) contribuitons? The tax free withdrawals of the VUL are a nice element but at what costs? You are right to only consider the VUL after you have at least contributed to your 401(k) at a matching level and maxed your IRA's. Then and only then should the VUL be considered as an investment tool, and it should be overfunded then. Your AXA agent is a fool. Besides there are better policies than Equitable's if you ever decide to go that route. Does he only represent one company?

By the way, I think it was Jim that said your death benefit on a VUL is income taxed to your heirs. WRONG! They will receive the basic policy value less any previous withdrawals income tax free. However, if you own the policy it will be included in your gross estate for estate tax purposes, but so will everything else you own. I think Jim was confusing Variable Life with Variable Annuities. They are two totally different animals.

Good luck!

Alan McKnight, CFP
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