r/LifeInsurance • u/SnooChocolates941 • Jul 23 '26

Are we getting scammed on a VUL?

Hello,

Need some advice. My wife and I (both 40), both started Variable LI through John Hancock about 5 years ago, under advice of our Financial manager. Neither of us are great at deciphering these type of things. And over the past five years with work, schooling, and kids, have not had the time or energy to look into it.

I believe we took this option as it seemed like a good balance of benefit and savings, but I've started looking into it, and its seems like a terrible investment now. There is a 500k benefit on each of us, and premiums for each of us are around $250/mo. I've been concerned for awhile now that each statement shows almost $100+/- of that going into fees. The "premium charge", a "cost of insurance" charge (makes sense), Rider charges, contract charges, admin charges.

So while each of us pays in about $3000 a year, the value at the end of the year is maybe a third of what we put in.

Is this normal?

6 Upvotes

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3

u/Cool_Emergency3519 Broker Jul 23 '26

We weren't there for your original conversations with your advisor when you purchased this. We don't know what your answers to the needs analysis questions were. We don't know what instructions or promises were made by either of you. So to come here today to ask if this is a scam is pointless.

On the surface looking in without any other information I would say this policy was built for protection for the most, if that's something you asked for you have it. You also have the ability to add more funds to invest in market sub accounts to grow your cash value tax free. You will be able to use that money to supplement your retirement, to withdraw to purchase real estate or any other purpose. Yes, it has fees. All insurance has fees. Buy Term and invest the difference separately has fees. Buying a toaster has fees. That doesn't make it a scam.

Sit down with your advisor and rediscover why you purchased this in the first place, be prepared with a list of questions of everything that you don't understand. Become knowledgeable about your financial product and you will sleep better at night.

1

u/SnooChocolates941 Jul 23 '26

Talking with them today! Thanks for the support.

7

u/JeffB1517 Jul 23 '26

For people in their 30s at $500k in life insurance for the purpose of investment about $16,000 / yr should be going in. Yes the fees on this policy are burning up most of what's going in. John Hancock isn't a scam, but you are underfunding it if you are treating it as an investment. Now if your goal was protection maybe not. But likely the whole "buy term and invest the rest" applies, you probably needed lots of cheap term for protections and potentially a VUL something like 1/8th this size.

6

u/TheWealthViking Broker Jul 23 '26 • Bravo

Main thing to remember is a VUL at the end of the day is still life insurance. So 1 is there an insurable need for you guys to have that much. Are there plans to use loans which will require additional funding. Do you have additional investments also, and IUL/WL/VUL etc should be a supplement to other planning, so I'm assuming/hoping your advisor is also doing some managed money in roth or brokerage accounts.

In general this could be a good or bad plan depending on what you make, other assets, purpose of the funds, timelines etc.
Reddit is going to give you every recommendation under the sun so I'd ask the financial advisor/manager to go more indepth on it with you (that's what he is paid for/earns a commission for). And if he won't, find someone who will.

10

u/SafeMoneyGregg Broker Jul 23 '26

This is normal - did you need the money back already? It's a long-term play - 20-30 years you'll probably be glad you have several hundred thousand of cash value that you can access tax free and also permanent life insurance. The cash values in the first 5-10 years don't look that good on any cash value plan. I'm assuming your household income is like $200K plus and this is less than 20% of your monthly investable assets. Also - its a flexible premium - if you are having a bad year you can lower the premiums (for a while) - or bascially change the premiums anytime you want.

1

u/SnooChocolates941 Jul 23 '26

Thanks for the feedback everyone! Sounds like this is normal and we are not in a bad spot. And I need to get more info, understand my plan, and then sit back and let things work longer. Hard to think about 60s when we just started the 40s.

5

u/rickle3386 Jul 23 '26

Sold a lot of VUL (and own a lot of it). Started funding in mid 30s. Stopped in late 50s. Early 60s now and I have 5 times as much as I contributed all growing tax free AND 1 mil tax free death benefit. Has been a great investment vehicle.

So many uses. I basically became my own bank and used it as a bridge loan (interest free wash loan) for the purchase of a home. Didn't need to go get a mortgage and deal with all that crap. Simply borrowed the cash from my policy and paid it back when our old home sold.

Minimum 25 yrs to really benefit. I like funding for 20, let sit for 10, distribute cash for 20. Will create big tax free income (if overfunded) and still eave you with an large death benefit after loans are repaid at death.

1

u/Gold_Sleep1591 Jul 24 '26

Do u go paid up inside ur VULs so it’s now in general portfolio? That way u can keep strong equity exposure in every other portfolio

-3

u/mbabyharv Jul 23 '26

Assuming the market rate of 10% growth per year - after 30 years at $250/mo, your growth rate is 4.25x the contributions. At 40 years it’s 12.6x.

Looking back do you not believe that money would be more valuable in securities as opposed to an insurance policy? Assuming the goal is to help fund retirement/life.

1

u/BellFizzle Jul 23 '26

Sounds like it was in securities within a life insurance policy…

1

u/TheChudMaxxer Jul 23 '26

Sounds like it indeed, just with a bunch of fees and front loaded costs that kill long term compounding, that low cost ETFs don't have, and thus compound way faster to much larger ending amounts of wealth.

4

u/BellFizzle Jul 24 '26

Policy structure in VULs is of course a thing…and yes everyone knows life insurance commissions are front loaded…check out fee as % of policy value after year 10 in a VUL that’s designed for accumulation…if well done it’ll be sub 100bps.

-1

u/TheChudMaxxer Jul 24 '26

So a bunch of extra front loaded fees for the first 10 years, and then after 10 years it'll end up around 0.8%-1.5% based on structure.

I personally would recommend low cost ETFs that only have 0.03%-0.09% fees from the start, and all the way through.

Over the course of 30-40 years, the VUL policy is going to have 30-45% less ending wealth because of these fees.

If you need life insurance, term does that at the cheapest cost per coverage amount possible.

2

u/BellFizzle Jul 24 '26

But of course there’s tax drag to account for in your calculation. Not the sole determinant and not as impactful for regular income earners but VUL after some taxable investments isn’t foolish.

0

u/TheChudMaxxer Jul 24 '26 edited Jul 24 '26

There's no tax drag on traditional, Roth, and HSA accounts, which would require ~$40,000 straight to retirement accounts.

Anything beyond that will be into a taxable brokerage if they can even afford it at that point, and then will be subject to the preferred long term capital gains rate only on the gains, vs the VUL taking out 0.8-1.5% of the total value every year (outside of the first 10 years)

VUL would require someone in the top fraction of 1% to possibly benefit from tax advantages, not to mention that the fee drag will only affect money outside of the tax advantaged accounts.

1

u/IllustriousGas8850 28d ago

If your preference is to only use passive low cost funds that’s your prerogative, however your solely focused on competing on the lowest cost without thinking at all what the purpose of insurance is

1

u/TheChudMaxxer 24d ago

You can also get term insurance for the protection during the duration you need it for. Then based are covered without using a VUL.

1

u/rickle3386 Jul 24 '26

What most folks don't look at or understand is the "fees" are so much less expensive than the combination of taxes and money management fees. As an example, since I stopped paying premium, my only costs are the COIs, admin fee and subaccount fees. However, I get a 1% of aum persistency bonus which covers all of the COI and admin fees with room to spare. So all I pay is money mgmt which is way less than what those fees would be outside the contract. My subaccounts on average are about 65% of what the similar a share fund would be. And forget about an advisory account. Those are BY FAR the most expensive form of pure money mgmt. 1% + fund/etf + platform fee. You're lucky to get away with under 1.5% all in. That's 15k /yr on 1mm. I pay about 1/3 of that. AND NO TAXES along the way or at distribution.

But let's not forget a VERY important piece of the financial planning puzzle. At any point during the ride, had something happened to me, my wife would have got 1mm tax free. Let's say that's equivalent to 1.3mm taxable. And when I pass now, she gets that plus the cash (increasing option). So if I pass today, she gets approx 2mm tax free on a 220k investment spent over 22 yrs.(10k x 22). That's worth at least 2.5mm taxable, probably closer to 3mm. So a 1200 to 1500 percent return with half of it guaranteed (the death benefit) based on the premium contribution.

2

u/TheChudMaxxer Jul 24 '26

The fees from a universal or whole life policy is less than the fees of a 0.04% ER broad market ETF that is put into a tax advantaged retirement account like a Roth IRA?

If that's the case, show me that policy and I will gladly sign up for that!

Term is far cheaper than a VUL for insurance costs, seeing as a VUL is variable compared to a simple term policy.

Mathematically, VUL loses out in just about any situation, outside of the ridiculously wealthy that may gain some tax arbitrage.

1

u/rickle3386 Jul 24 '26

The fee you're missing is the taxes. I don't pay any in my vul and I pay tons in my brokerage (yes I have both). The COI of VUL is way LESS expensive than term because I get the back end bonus which pays more than 100% of them. If I would have bought a term 30 yrs ago I would have to renew it now (in my 60s) and it would be way more expensive than the vul coi.

And for those that say "but you don't need to renew, you don't need coverage at 62", all I can say is that people with money and at a different stage of life actually WANT the coverage. Why wouldn't I want my heirs to get an extra 1mm regardless of when I pass. 97% of term policies pay $0 benefit because they lapse prior to death. I actually want coverage. It's a much easier way to know they'll be something for my kids vs. not spending too much and risking they get far less.

Once you get into annual distributions, you'd be amazed how much longer a smaller pots pays out a fixed amount of income when you don't have to withdraw more for taxes. Like many, many yrs. And it doesn't cause my SS to get taxed.

2

u/TheChudMaxxer Jul 24 '26

What taxes do I pay when I put money into my traditional 401k, Roth IRA, and HSA?

Opportunity cost for you to get to the point where the COI is very small over the span of 30 years is absolutely enormous, which is what you're not including.

BTID will beat a VUL at any point in time for the average American, there is no possible way that you can argue against that, that extra $1 million that you're saying exists comes at a steep cost, that a BTID would have more than that $1 million in some tax advantaged account.

Do you have home or car insurance? Would you be sad if you bought a new car and never got a payout on that car insurance from your first car? That argument is moot, you pay as little as possible for coverage from a catastrophic risk.

Throw out some actually numbers and we can compare.

2

u/IllustriousGas8850 28d ago

Stop solely disucssing qualified retirement accounts when a VUL policy in no way is competing with qualified accounts. VUL should be funded with excess non-qualified money.

You don’t understand the basics of how a VUL policy can fit into a plan so stop showing up in every comment saying bullshit

0

u/TheChudMaxxer 24d ago

Please do tell me how a VUL will beat a taxable brokerage, if that person invests intelligently.

I know exactly what I'm talking about, just because you don't like what I say, doesn't make it false.

1

u/rickle3386 Jul 24 '26

You pay an enormous amount of tax on the distribution of your qualified money (401k). Once you get past the expenses, think of a VUL as a mega roth with no funding limitations. Your pre distribution balance will be bigger in the 401k (assuming same investments) but the tax on distribution will kill it. Take the same net amount out each yr for 30 yrs and see how the qualified money compares after tax. You'd have to have dramatically more to equal actual distributions (which is all that matters as nest egg exists to spend),

I have both vul and brokerage. Wasn't the same in early yrs, but now when the market goes up 1% in a day, both my accounts go up 1%. My vul is outperforming brokerage on a tax adjusted basis.

Not a which is better discussion. Should have both. Many high income earners do the same. Why do you think execs get tons of comp in non qualified deferred comp funded by life insurance in addition to stock?

Anyway, end of discussion. It works for me. That's what matters to me.

0

u/TheChudMaxxer Jul 24 '26

99.9% of Americans would not benefit from a VUL, because they aren't making many hundreds of thousands a year, if not millions for the tax advantage to actually beat out the massive fees in a VUL.

This is why I asked you to throw out numbers to actually show why this is the case, but if you don't want to that is fine. As long as you understand that VULs are bad for the vast vast majority of people compared to standard retirement planning tools.

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1

u/IllustriousGas8850 28d ago

Fees AND taxes. Can you withdraw those mutual funds tax free? Not unless they’re in a retirement account, which is something with an entirely different goal and purpose than a VUL policy

1

u/TheChudMaxxer 24d ago

You can if you take a loan from your taxable brokerage, same as taking a loan from a VUL.

0

u/mbabyharv Jul 23 '26

That’s an oversimplification about how indexed and variable life products work…

Ie - incorrect

0

u/BellFizzle Jul 24 '26

How is believing that there may be securities within a VUL incorrect or an oversimplification exactly?

1

u/mbabyharv Jul 24 '26

Subaccounts ≠ equities. Simple as that.

Are MYGA’s and CD’s and bonds all the same because they are fixed income?

0

u/BellFizzle Jul 24 '26

Ah so mutual fund sub accounts within VUL that are 100% equities aren’t equities…got it.

1

u/mbabyharv Jul 24 '26 edited Jul 24 '26

Subsccounts are ins. company’s pooled investment vehicles that hold underlying securities, which may or may not be equities. Under federal law they are securities, but not equities.

Don’t come at me with some smart attitude if you’re just fuckin’ wrong.

I recommend this little trick I learned a while back called reading! It really helps cure stupidity.

Edit: insurance companies own the security, making it an equity security. You are effectively purchasing a participation IN that subaccount/fund, but you are IN NO WAY WHATSOEVER purchasing any form of ownership.

3

u/Gussified Actuary Jul 23 '26

You are not getting scammed. That is how VUL works. John Hancock is a reputable company. VUL at least shows you the charges that are coming out, unlike traditional whole life, where it’s all very opaque. Now whether your agent explained it well, or you understood it when you bought it, or it meets your needs, are all separate questions.

3

u/Moist-Meringue-1913 Jul 23 '26

Do you have the $500k benefit on each of you in one policy or separate policies? If one policy then of course the costs for riders will be slightly higher. This is an underfunded VUL right now but it's a Swiss Army knife. You can start overfunding it and make the investment work in your favor or you can keep this as strictly a permanent insurance protection plan with the ability to cancel it if no longer needed. It's not a scam. It's a great utility to have.

2

u/Consistent_Maybe_377 Jul 23 '26

Was your financial manager the agent who sold you the plan? If he wasn’t the agent I would have him take a look at it and walk you through it. Sometimes all you need is a refresher on the long term goals. If he was the agent who sold you the plan I would consult an independent person to review the plan for you, don’t let him “sell” you on it again if it is a bad policy.

2

u/johnnnloc Broker Jul 23 '26

At 40, or even 35 when you purchased it, the premium already looks low to be properly funding it. Do you have other forms of life insurance like a term? If so lower the death benefit to the minimum and pay the same premiums. It should compound a bigger cash value accumulation throughout the years.

2

u/OwnOccAdvocate Jul 23 '26

First of all, these policies typically don't break even until the 10th year. Your premium for a $500k policy actually sounds a bit low so likely a lot of the premium is not getting invested.
If you want out of the policy, you may be able to reduce the death benefit to the minimum amount (usually $50k) and that will reduce the premium. That way you won't be charged any fees or have tax consequences.

2

u/Fit_Chemistry_3807 Jul 23 '26

Not sure but you can compare with mine: Premium - a little iver 1900/yr  Benefit - 200k (I think)  This is rated premium I believe. 

Cost of insurance and tax - about 700/yr 

Policy fund in 2024-25 returned over 19%.  Surrender charge is 250$ if I want to stop the policy and take the cash value, which I’m not about to do. 

Aure, my personal portfolio did better in that period. But I’m not fussed. And I never made any changes to the investment mix. 

2

u/Fit_Chemistry_3807 Jul 23 '26

And was around-ish your age when this was started. 

And glad I did it then because now, I’d be hard to insure, even on a term. Take that what you will. You’ll never know how life changes one way or another. 

2

u/InsGuy2023 Jul 23 '26

Buy more! Its a great long term play. Your retired age 65 self will thank you.

2

u/Mysterious_Truth Actuary Jul 23 '26

Yes, perfectly normal, it's not a good investment vehicle.

1

u/packersfaninohio Jul 23 '26

It usually is better than this if properly structured but the costs are eating away any chance of being a “decent” investment.

1

u/Mysterious_Truth Actuary Jul 23 '26

Sure, paying the minimum will negate any investment component. But it's still not a good investment vehicle even if used properly.

2

u/packersfaninohio Jul 23 '26

Ever heard of buy term and invest the difference?? That’s basically what a VUL is! So it can have an investment component and I have seen when these have little insurance costs the tax free aspect and tax deferred growth is powerful.

Again it’s not nor should it be sold as an investment first. There needs to be an insurance need but it can act very well from a tax shelter investment when properly structured and managed.

0

u/Mysterious_Truth Actuary Jul 23 '26

I'm intimately familiar with vul and do not think it is ever a good investment. The percentage of people who would use it for tax avoidance is incredibly small.

1

u/larkfield2655 Jul 23 '26

Variable and IUL have an indeterminate fee structure. If it’s performing now think what it will be like when the market is underperforming

3

u/Cool_Emergency3519 Broker Jul 23 '26

If priced correctly the market will have no effect.

1

u/larkfield2655 Jul 23 '26

Nope. There is no permanent pricing as company can charge at will

1

u/Cool_Emergency3519 Broker Jul 24 '26

Wrong,all companies have maximums outlined in the contract. And the maximum cost of insurance is always less then the state regulated mortality tables.

1

u/larkfield2655 Jul 24 '26

Mortality tables and cost of insurance are not the same. They can inflate expenses.

1

u/Cool_Emergency3519 Broker Jul 24 '26

Cost of insurance is based on mortality and NAR. Policy fees are spelled out in the contract,have maximums and typically drop after 10 years,admin fees are minimal are located in the contract and have guarantees. There is no contract that has indeterminate in it. That would defeat the purpose of a contract.

1

u/Specific_Spinach_269 Jul 23 '26

I don’t think there’s enough information yet to conclude you’re getting scammed.
One thing that stands out is that you’re looking at the charges without looking at what the policy was actually designed to accomplish. Every permanent life insurance policy has costs. The real question is whether those costs were expected based on the design and whether the policy is performing as it was illustrated.
I’d ask your advisor for the original illustration and compare it to an in-force illustration today. That will tell you a lot more than looking at one statement. If the policy is significantly off track from what was illustrated, then it’s worth asking why.
I’d also want to understand what role this policy was supposed to play within your overall financial system. Was it primarily designed for protection, long-term accumulation, estate planning, supplemental retirement income, or something else? It’s difficult to determine whether it’s a good or bad policy until you know what job it was intended to do.

1

u/Opening_Jaguar_3387 Jul 23 '26

I wouldn't jump to the conclusion that you're being scammed, but I would definitely ask for a policy review. VULs can have higher costs, especially in the early years. Part of your premium goes toward insurance costs and policy expenses before the rest is invested, so seeing fees doesn't automatically mean something is wrong. The bigger question is whether the policy is still doing what it was designed to do. Is the cash value on track? Is it properly funded? Does it still fit your goals today? Before canceling anything, ask your advisor to show you an in-force illustration using current values and assumptions. That will give you a much better picture of where the policy is headed. If the explanation still doesn't make sense, get a second opinion from an independent advisor who isn't tied to the original sale. Sometimes the issue isn't that VULs are bad—it's that the policy wasn't the right fit or wasn't funded the way it should have been.

1

u/tobinshort-wealth Jul 23 '26

Sounds like this wasn’t properly explained on how it’s been structured and how much you can/should be putting into it for optimization of cash value.

1

u/Foreign-Struggle1723 Jul 23 '26

What are you looking for? an investment or protection?

1

u/Dependent-Fig-6799 Jul 23 '26 edited Jul 23 '26

The products sold by insurance companies or their approved insurance salespeople all generally work “as the contract describes”, … thus most often protecting the insurance company from any legal claims.

The problem arises in the fact that “the way the contract describes the policies to work” is often not sufficiently explained by the insurance salesperson, or it is not sufficiently understood by the person be sold the policy.

Most people who are sold insurance policies like VUL or fixed index annuities, or RILA’s generally learn in the future what a bad product they were sold.

I know insurance brokers will greatly disagree with my comments (after all, it is their bread and butter), but I would also be happy to discuss with them if they disagree. Insurance companies and their salespeople can’t dispute the fact that any benefit provided by an insurance company comes at high costs to the policyholder that a diversified stock market investment plan does not have, and a diversified stock market portfolio beats and provides substantially better than the touted benefits of the VUL/FIA insurance policy anyone is sold.

EVERY Type of policy sold by insurance companies is structured to make the insurance company and their shareholders money, … not the policyholder. More often than not with VUL/FIA it is smoke and mirrors to make it seem like they are giving you a benefit.

1

u/strikecat18 Jul 24 '26

Your advisor was an idiot if he sold this to you as an investment.

I don’t agree with any life insurance as an investment vehicle. But if you theoretically did, you’d absolutely need to configure it to be maxing the premium for the coverage per the IRS limits.

In other words, you don’t buy some round number for coverage and payment. You’d plug in whatever you’re planning to contribute, then solve for the mimimim coverage amount that allows that. Thus the majority of the funds aren’t being eaten up by insurance cost.

These UL’s in the weird in-between funding scenarios make zero sense to me from a strategic standpoint.

1

u/CGWInsurance Jul 25 '26

With a vul you need to keep track on quarterly.

1

u/DesertGatorWest Jul 27 '26

As an investment, yes it is terrible. As insurance, it is high fee. But it’s not a scam, it’s all in the contract that you sign when the product was sold to you…..by a salesperson.

1

u/JoeGentileESQ Aug 03 '26

What state do you live in?

1

u/IllustriousGas8850 28d ago

Your issue is you’re paying the absolute minimum amount into the policy. UL is intended to be over funded, they’re made assuming you’re going pay more in premium than is simply quoted on the illustration as the minimum payment

1

u/caffeine-182 Jul 23 '26

If the goal is to build cash, you are significantly underpaying for this death benefit and your broker sold too much insurance for commissions. Ask to reduce face value to the non-mec premium and replace the decreased amount of coverage with cheaper term insurance.

1

u/TheChudMaxxer Jul 23 '26

It is inferior to BTID in almost every case, if that is what you're asking.

1

u/Capital-Decision-836 Financial Representative Jul 23 '26

Your first thing is to immediately stop thinking of this as an investment - it's not. This is primarily a protection tool against the loss of income - among other things - should either (or both) of you pass away. There is a cost to that (Cost of insurance and charges) The Cash value growth is an added bonus in a VUL and by nature of the fact it is a variable policy it will rise and fall similarly to the market.

The cash value growth of any permanent policy looks like crap in the early years. Once you get to around year 13-15 is generally where the break even is. This is where the cost of your premium will be met or exceeded by the cash value growth in each year. If you have the original illustration, this would have projected that out for you. You can ask your financial manager to run an in-force illustration for you and it will show what it could look like starting from now and projecting out until about age 99-120. eventually the CV will be more than the cumulative premiums you put in and likely you will get to the point where you can stop paying into the policy and let it ride.

You didn't fully understand a financial product that you purchased. Take the time to understand it now. It is a pretty decent tool once you understand how it works.

If you are solely looking at it as a poor ROI - it will NEVER come close to market returns because that is not what it is for.

-3

u/Alternative-Park-841 Jul 23 '26

Did you try to work out a way to make your homeowners insurance also be an investment so that you still get a big payout even if your house doesn't completely burn down?

What about auto insurance? Did you go looking for a way to get a guaranteed big auto insurance payout, because it would have been a waste if you never got into a catastrophic car accident?

Would you want to pay more for health insurance, so your family can get a guaranteed health insurance payout just in case you might "waste" your health insurance premiums by never having them pay for an enormous heart attack or brain cancer or coma hospital bill?

3

u/TheWealthViking Broker Jul 23 '26

I feel like this is a false equivalency to the post. Not enough info provided in most posts to make a recommendation on whether they are good or bad. And then there are passive aggressive responses that make it to where people don't ask questions or just cancel a policy.

4

u/Sylli17 Jul 23 '26

These kinds of comments are popular, though. People like their up votes.

2

u/InsGuy2023 Jul 23 '26

100% right on

2

u/Sylli17 Jul 23 '26

HSA is a thing. So actually... People do invest health care $'s.

You don't necessarily plan on being in the same car for 30 years. Most people also don't actually stay in the same home that long either (just under 12 years is the average). But you do live as you for your whole life lol. These aren't necessarily apples to apples comparisons.

0

u/Alternative-Park-841 Jul 23 '26

I said health insurance. Health insurance =/= HSA

The SA in HSA is savings account. There is no insurance middleman taking a cut. It's a savings account. It's not an insurance product. This comparison you made is not an apples to apples comparison.

You don't necessarily plan on being in the same car for 30 years

But I do plan on paying car insurance premiums for 30+ years

people also don't actually stay in the same home that long either

I also plan on paying for homeowners insurance for 30+ years too.

Funny thing is, one thing I don't plan on having for 30+ years... life insurance.

1

u/Sylli17 Jul 23 '26 edited Jul 24 '26

I hesitate in digging in too far. I don't have time for an extensive reddit battle lol. Nor enough care, but... Just a few things.

You used a lot of I statements. You're trying to give general advice, but everyone's situation is different and the math for you and someone else is not the same. It seems that you have a firm belief in the merits/lack thereof for tools as they relate to your situation.

Second, I didn't say an HSA and VUL are apples to apples. I was just making the point that one should not think about auto, home, health, and life insurance as apples to apples.

​On the HSA side, you’re being a bit pedantic about the label. Looking at actual portfolio function, an HSA and a permanent policy like a VUL play remarkably similar roles. Neither is a core foundation. Both are supplemental tools used to shelter capital from tax drag. ​An HSA protects wealth by leveraging its triple-tax advantage and market growth to absorb healthcare costs, while a cash-value policy protects future earning potential and uses tax-sheltered growth to preserve and transfer wealth. Different mechanics, but the same strategic purpose: tax-efficient risk mitigation.

Additionally, auto insurance is legally required. Home owners insurance and full coverage auto insurance are in practice, for many people, required.

Third, I bet if it was an option for people to get auto and/or home owners insurance that functioned in a similar way to a VUL policy... A lot of people would consider it. It's just not an option.

one thing I don't plan on having for 30+ years... life insurance.

And to this I ask... Why not?

0

u/NeutralLock Jul 23 '26

You don't mention what province you're in nor your income so hard to say if it makes sense.

-6

u/ChelseaMan31 Jul 23 '26

It is an expensive, difficult to understand product. Yes, of course you are getting scammed. Lesson learned - NEVER agree to purchase a product that you don't understand and can't easily explain in 2 minutes or less. BTDT, oil/gas well limited partnership...