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My wife and I are being pitched a "Variable Universal Life" policy. In a
nutshell, this kind of policy is advertised to allow for after tax investing
in various mutual fund-like life-insurance investment vehicles for which all
investment growth is tax-free if certain (easy to meet) conditions are met.
There are other essential features that make this vehicle attractive but I'm
already a bit off topic so I don't want to go into it here. There are
certain and specific mechanisms that allow for this kind of policy to be
used as a capital accumulation vehicle for retirement and/or child education
funding. Suffice it to say that it's something like a Roth IRA without the
yearly dollar limit and without the kind of income cap that makes the Roth
unavailable to us anyway. It looks pretty legitimate but I had never heard
of it before this year even though the US congress had set up the
legislation which makes these policies possible in 1986.
It seems too good to be true....so I'm skeptical. A few questions. Anyone
have experience with or knowledge of:
- the workings of "Variable Universal Life" policies so that you have an
opinion about them pro or con?
- the degree to which the investment vehicles actually mirror their real
market Mutual Fund cousins?
- whether it's possible to use historical data on closes of these
vehicles to develop a switching strategy for them?
Any other feedback would be helpful.
Please reply privately so as not to take this mailing list more off focus.
For those interested in replies to this note, send me a note and I'll
forward them to you.
Steven Buss
Walnut Creek, CA
sbuss@xxxxxxxxxxx
"There's nothing more practical than good theory."
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