Variable Universal Life Insurance Vs. Mutual Fund?

what are the benefits and draw-backs for those? which is better?

Public Comments

1. You'll probably hear many people say, "buy term and invest the rest". I would not take out a VUL to replace investing, but you can use a VUL for your life insurance needs. Variable Universal Life Insurance is Life Insurance with a sub account that invests in mutual funds. Mutual Funds are a grouping of stocks and/or bonds. Mutual Funds can be used in a taxable or non-taxable (retirement) account.
2. The reason "people" say "buy term & invest the rest" is because all other forms of life insurance STINK. They are basically insurance w/ a savings account attached. The fees are ridiculous, you make a crappy return on your 'savings' & when you die, they keep the savings part, anyway! Even accounting for the tax effect, you can get a MUCH better return investing your own money in good mutual funds. For the record, I don't know where you even got the idea of an "(in)variabl(y) universal(ly) BAD life insurance policy, but make a point NOT to take investment advice from anyone who is selling something. That means, talk to your CPA, do your own research & THEN go to a mutual fund broker or insurance agent & tell them what YOU want. Don't let them just sell you their "product/pick of the week". Finally, keep your investing very simple. Mutual funds WITHIN your 401k/IRA/Roth/SEP/ESA, whatever & mutual funds without for other long-term investing. For short-term goals & "emergency" money, use a decent money market account with checkwriting privileges. Buy term insurance (10x your annual income) for 10-20yr term. Then get about the business of eliminating debt & building your investments. That way, when the term insurance expires, you will have enough in investments to live off the income & your won't need ANY insurance.