UL for Tax Reasons
The insured, a widow, lives in a medium-sized northeastern city. She was married for 61 years, but lost her husband in 2008 after a lengthy illness; she still has a daughter, a son, and five grandchildren. She and her husband owned a small chain of dry cleaning establishments, building it up from one storefront in 1962 to a total of 12 throughout the city. She is also very active in her church, and contributes both her time and money to various charitable causes under the aegis of the church, including foster homes, food pantries, and youth centers for girls.
After selling the business, she put half a million dollars into an education fund for her grandchildren and took out a universal life policy for RMD maximization, as well as for other tax and lifestyle reasons. The face amount was $2 million. With the recession beginning to kick in, she also wanted to protect her children (both teachers) and their families in the event of her passing. Fortunately, both families came through the recession relatively unscathed, with her eldest daughter’s husband doing quite well in his IT and Internet business.