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Life Insurance for a participant in a 403(b) plan (REVISITED)


Guest wex4

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we've been advised by members of this board to generally keep life insurance outside of qualified plans. If a 61 year old University Professor feels the need for life insurance; how do you feel about borrowing from the plan money to put into a variable life policy? If the stock market does go to 30,000 he is probably ahead in the long run and if it sinks short term then he still has the death benefit. What are the odds of a long term stock market decrease?

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Historically, not great. But then again, as one whose college money got seriously diminished by fairly long-term declines in the stock market back before the dawn of time (late 60s, early 70s), I tend to take the cautious approach.

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Is variable life insurance life insurance or an investment? One borrow from one tax-deferred investment to finance another? If the professor thinks that he can do better investing through life insurance, may it is time to upgrade the 403(B) plan investment options.

Does the professor have a rational need for life insurance? If yes, would it make more sense to purchase term insurance?

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