My wife and I are 33. We have no kids. We were just sold 250,000 dollars worth of Variable Universal Life a piece with several decent mutual funds within it(payments of $3,500). They assume an annual rate of return of 8.146%, and the plan is for us to take out $30,000 per year at age 55 for tax-free income when we begin retirement. They sold us on the tax-free benefit of this income versus the fool's way of "buying term and investing the difference". We saw the tables outlining this growth, and it seemed plausible. We don't really need that amount of coverage but the death benefit goes down and stays within a reasonable amount when we retire so it doesn't seem like we are overpaying for coverage we won't need at that time and there is enough in there to keep the policy in force. My question is can we do better investing the $3500 less term premiums per year in someting else and still enjoy the same amount of income net after taxes? We have other investments already that will be taxed(Roth and 401K) and it seemed a good idea to get this policy for the tax free income but I'm wondering if we are doing the right thing, I've got some time before the policy goes into effect. Thanks for advice in advance.
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