If you’re shopping for life insurance, look into variable universal life (VUL) policies. You direct the premiums you pay among several investment accounts. If you die while you have dependents, the policy can provide for your loved ones, free of income tax.
If you enjoy an extended retirement, a VUL can be tapped for ongoing tax-free income, via loans and withdrawals, as well as paying death benefits to your heirs. If you accumulate substantial wealth, VUL proceeds can provide the liquidity to pay estate taxes. If you need long-term care, some VUL policies have a convalescent care rider that can pre-pay death benefits, generating cash for nursing home or at-home care.
Moreover, in most states, life insurance cash value is not subject to creditors. Thus, VUL can offer a means of asset protection, too.
