If your VUL is owned in an irrevocable life insurance trust in which you have none of the "incidents of ownership" the death benefit will pass estate tax free to your heirs. If you own the stock in your name, or have any of the incidents of ownership in the policy (that means you own the policy or retain the right to change beneficiaries, among other things) the value of the stock and/or the death benefit will be part of your estate in determining your federal estate tax.Thus, the policy itself vs. the stocks is not the issue. It is the ownership of the policy that is pivotal. With the stocks, they could be owned by a trust, but again the trust would have to be irrevocable, and you could not exercise control over the stocks in the trust, in order to keep this asset outside of your taxable estate.Regards--dharmadollars
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