Beyond standard coverage, sophisticated planning can elevate how variable universal insurance is used:

Irrevocable Life Insurance Trust (ILIT)

By placing the policy inside an ILIT, the death benefit bypasses the insured’s estate, potentially reducing estate taxes. The trust owns the policy, and the insured typically can’t alter trust provisions significantly after creation. Subaccount choices might still rest with the trustee, who aims to maximize growth while safeguarding the policy’s viability.

Family Limited Partnerships

In certain arrangements, individuals may employ family limited partnerships or other structures to hold insurance policies, distributing ownership interests among heirs. This can get complex but allows strategic control over how and when assets, including the policy, transfer across generations.

Charitable Remainder Trusts

A policy might be combined with charitable remainder trusts or charitable lead trusts, ensuring some portion of the final proceeds benefit philanthropic causes. In some cases, donors use policy loans or withdrawals to fund charitable gifts while retaining coverage for themselves or their heirs.

Such advanced strategies almost always require professional legal, tax, and financial counsel, given their complexity and the potential for missteps.