r2i forum

I just wanted to see what are the experts thougts on Variable Universal Life insurance ? I have mostly seen people talk aginst going for VUL's.

Anyone ?

Variable Universal Life Insurance is like going to a barber for a hair cut but then asking him to go shop for our clothes too on our behalf, while we pay him to do that, he also takes an additional cut unbeknown to us.

Variable Universal Life is Term Life Insurance, plus an investment. The dividends and proceeds from the investment pay for insurance after a few years of payment of premium.

Now you could accomplish same thing by buying term insurance and investing the rest yourself and repeat this and then using the dividends and proceeds to pay for life insurance in later years.

When you invest yourself, you are not limited to a few options they offer, but the world of investements is open to you.

The expenses hidden in VULs are large. There are large up front commisions, the funds selected generally have high expenses, etc, etc.

Thanks, Desi. The barber example was great! :)