Employer sponsored VUL question
My new employer is offering me a benefits package which will cost me approximately $12,500 (pre tax) per year and includes the following:
short term disability insurance
long term disability insurance which I can keep if I leave. No medical exam required. No pre existing conditions exclusions
a variable universal life insurance policy which works as follows:
Company owns the policy, in the insured, I chose the beneficiary. Policy is 1.2M death benefit.
For the first 10 years, company puts $22,500 in per year. If I leave company, they pull out what they put in and, if there’s a residual cash value, I can surrender the policy and keep (and pay taxes on) what’s left. At year 26, when I’m 67, company will pull out their 225K and then over the policy and it’s cash value at the time to me and then it’s mine to do with whatever I chose.
About me. 41 male with no children. Have a long term girlfriend I live with. Only debt is my home which is mostly paid off. I currently have a 1M term policy through 65 that’s pretty cheap. Company gives me 1x my salary in my benefits package.
Can anyone give me some insight into why my company would want to do this? Is this policy going to be that beneficial to me in terms of tax free income in retirement? I’m just now learning about what a VUL is and it hadn’t been part of my retirement savings plan.
