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My reference was to such situations purchased outside a pension or retirement plan of any sort. Under any circumstance I can imagine, owning life inside a pension or retirement plan would be about as logical as holding municipal bonds in the same.

[If the Federal Estate Tax were restored life insurance when allowed within a qualified retirement would be have these positive advantages:

1. Premium tax deductible, except for the pure insurance "at risk" (difference between the face amount and the cash value and/or separate investment account) charge

2. The insurance "at risk" amount is not subject to Federal Income Tax when received by the designated beneficiary

3. The entire face amount is not subject to the Federal Estate Tax

4. The cost for life insurance within a defined benefit pension plan is incorporated into the entire cost to fund the benefit. The cost for a defined contribution plan can be brought to a stop through the utilization of the premium offset concept.]

More or less, what I was getting at was annuities or other non-retirement stuff wrapped in a life policy.

[I do not believe in annuities for purposes of accumulating money for the following reasons: (1) the value at death does not receive a stepped-up-in-basis, (2) the internal costs are greater than for a no-load mutual fund, and (3) penalties involved getting to the money prior to age 59 1/2.]

[Regarding life insurance "in or out" of a qualified retirement should only be purchased if one has a need for life insurance. A "rose by any other name is still a rose" insurance is life insurance.]

You could even stretch it to include variable versus whole life.

[I am a whole life advocate when non-term life insurance is to be purchased. Variable and variable-universal life ledger statements most likely use the "constant average interest rate" when illustrating values...this is not reality.]

Now that you mention estates, I guess it could include a Crummy or other trust as well, but that wasn't the central question. Can you take another swipe please?

[Swipe at what?]

And, on the question of commissions, can you provide an answer if all else is equal, which pays a greater commission defined benefit or defined contribution?

[Same answer depends upon (1) premium, and (2) commission percentage paid by the specific life insurance company.

William D. Brownlie, CLU, ChFC, CIP, LIA

This email advice is designed to provide accurate information in regard to the subject matter covered. It is performed with the understanding that William D. Brownlie is not engaged in rendering legal, accounting or other professional service including actively selling life, disability, long term health care insurance, and investment advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

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