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Subject:  Re: To invest in VUL or not? Date:  9/24/2000  6:41 PM
Author:  JAFO31 Number:  25031 of 105397

kshouser: "An acquaintance with Northwestern Mutual Life has been pushing my husband to invest in a VUL - variable universal life policy. We're both 40 - and he works for a Fortune 500 company with a good matching plan, pension, etc.. He already has a $1 million life ins. policy (term) - $93.00/month.

Is it worth it, (he suggests investing $2,000/monthly) - for tax benefits alone?? Do you think this amount of money would be better spent paying off our home or investing elsewhere? Please advise. What are the pros/cons of this investment vehicle??"

This issue has been discussed numerous times on the Insurance board; move over and run a search.

From my notes:

You may want to take a look at FoolWAM's post #1913 at to see if you'd be a good candidate or not.

Also from FoolWAM

1605 on the Ins. board, and its thread

and especially post 1603

In addition, post 1309 from dharmadollars:

"The rule is that the policy must remain in effect until your death in order for policy loans to excape classification as income. Also, remember that all withdrawals up to the amount of your aggregate premium payments constitue return of basis and are not even potentially a taxable event. It is only when you begin to take policy loans that potential tax impliciations arise."

As long as you realize that you are essentially making a lifetime commitment, have let no other tax advantaged options untapped or unfulfilled, and you intend to substantially overfund the policy, and funding the VUL still allows you to acquire all desired insurance, it may hold some interest for your.

Enjoy the reading.

Hope this helps.

IIRC, the insurance pros on the Insurance board do not think that highly of NWM VUL because its underlying chassis is a whole life policy (NWM's strength). Also, check out the huge fees - 8% for sales cost and taxes, IIRC.

A VUL may have a place in an investment portfolio, but you do no come close to providing enough information for anyone on these boards to really make an informed guess.

Regards, JAFO
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