[votemout]

It would seem better to have the asset in a non-taxable fund rather than in taxable assets, whether I have less than 3.5 or more.

[Mr. Lucky]

...except that you would no longer own it. If your estate is of sufficient liquidity and size to allow substantial cash transfers to your children, gifts of annual life insurance premiums may be a good idea, but if your estate is not liquid, maybe not.