529 Plan Investment Changes
June 3rd, 2006
Question: Is a 20 year convertible term the same as a VUL?
We signed up with a financial advisor via an affluent and trusted friend. The advisor suggested we do a VUL ($500K) in addition to the fact that my husband (sole income) already has a $500K Life Insurance policy through his work–to supplement a 529 college plan for our newborn. I (wife) did some research and found that a VUL (life insurance) is a terrible investment. I told our advisor we did not want to do a VUL. Our advisor changed the paperwork to “20 year convertible”…I feel it’s the same thing, different terminology…clarify please.
Answer: No, those terms are NOT the same thing, like a steering wheel and brake are different things, too.
Me, I’m not a major fan of VUL, either, but I want to remind you that LIFE INSURANCE IS NOT AN INVESTMENT. It’s a death planning tool.
So, do I think a 20 year term, $500K guaranteed renewable and convertible policy is a good thing? Yes. 5 year? No. *I* am insured with a 20 year renewable/convertable term policy.
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