Skip to main content
No. of Recommendations: 0
Zev - I would stand by VUL as an insurance policy with an investment component. Its claim to fame is its flexibility & utility to provide long-term insurance protection & allow for some capital growth opportunity above the rate of inflation.

Variable Anuunities (VA), on the other hand, are more of a capital accumulation program that have a bit of "insurance" to them. They are best used to supplement other retirement savings programs because they build capital on a tax-deferred basis.

Consider this: If you paid $100/month into a VUL and another $100/month into a VA, at the end of a year the VUL's cash surrender value would be minimal (a few hundred dollars I guess), while the VA's would be $1200 + the actual growth produced by the separate investment subaccounts. Of course if you died at that time the VUL's payout to your beneficiary would be much greater ($100k or so, depending on your actual face amount provided through underwriting), whereas the VA would pay your beneficiary only the actual cash value ($1200+ growth). Another difference for the beneficiary: the proceeds from the VUL are tax-free, but the VA's are taxable to the same extent as they would be to you!

Hope this helps... Good luck & best wishes, PP
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.