[Mr. Lucky]

The value of a life insurance policy owned by a decedent is included, for federal estate tax purposes, in the value of his gross estate.

You can have a child, say, own the policy and make gifts to the child of an amount sufficient to pay the premiums, but there are obvious drawbacks to that tactic.

[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.