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Author: TTRoberts Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75594  
Subject: Re: IRA Distribution/Life Insurance Date: 8/25/2000 12:59 PM
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TooOld, when you asked:

<< A CPA suggested buying a Variable Universal Life policy (?) with the IRA money which we don't really need but must take out at regular tax rate. CPA says after a time we could borrow against the policy tax free if we need $$. Never heard this idea discussed... What is a VUL? Is this a good idea? >>

BGPenhollo is correct when he said "A lot depends on what you have and what you want." And that the key as to whether or not the numbers will show if this approach can work for you or not.

BGPenhollo also suggests that this technique is only appropriate if one has a net worth "in the millions" and that "except in very special cases, these are a bad idea."

While it is true that the technique does not work well in ALL cases (even badly in some cases), it certainly works in MANY cases and NOT just in some "very special cases". One DOES have to crunch the numbers to see if it works give reasonable assumptions within a particular case.

Whether it's "lucrative" or not for an agent selling the life insurance contract is immaterial. The issue is whether it works in YOUR case or not. So, have your CPA help you crunch those numbers and THEN decide whether it's a good or bad idea. It's NOT a good idea to just assume one way or the other and not at least check out the details in YOUR particular case.

Lastly, I must point out, BGPenhollo suggests that most agents sell VULs using a variety of techniques "without telling the customer the cost of the product >> This is incorrect as it's against the law not to disclose the costs associated with a VUL . . . or any other security for that matter.








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