My parents want to get a million dollars of life insurance and put it in a trust as a way to avoid taxes for the inheritance. They think that taxes will be raised by significant amounts in the future. I said that it's not a good idea and life insurance is not a good investment. I told them that the money they put in won't even keep up with inflation and showed them a compound interest calculator where if they just put it into mutual funds it would grow more.
Is there anything I can say to convince them? Is there anything about the taxes I could tell them about?
edit: thanks for the response, i saw the thing about the 11 mil gift which I knew about but didn't know for couples its double. They said the one mil life insurance thing is only for diversification cuz they have some other assets and money elsewhere thats more than that around 5 million so that should still be under the limit. thanks again