How can VUL policies become a part of an estate planning strategy?

VUL policies can play a significant role in an estate planning strategy by providing liquidity to cover estate taxes and support beneficiaries. When an individual passes away, their estate may be subject to various taxes and debts. In such cases, having a Variable Universal Life insurance policy in place can ensure that the death benefit is available to cover these expenses, which prevents the need for beneficiaries to liquidate assets or face financial hardship during a difficult time.

The death benefit from a VUL policy is typically paid out quickly and can be used to settle estate taxes, debts, or other financial obligations, ensuring that beneficiaries receive the inheritance intended for them without delays or complications. Additionally, since the death benefit is often received tax-free, it allows for a more straightforward distribution of assets, preserving the overall estate value for heirs.

This function of providing necessary funds in a timely manner and in a tax-efficient way illustrates how VUL policies are not just life insurance products but also strategic financial tools within comprehensive estate planning.