Dear Bruce: A financial planner has advised my wife and me to take out a reverse mortgage on our home, which we own free and clear. They recommend we use the funds to purchase a $350,000 life insurance policy on my wife. This, they advised, would allow our daughter to inherit the $350,000 with no tax liability. We could then invest the remaining money and have more income. We own some rental property that is free and clear and have approximately $700,000 in cash assets. We would like to know if getting a reverse mortgage is a good investment strategy for our situation. – R.P., via e-mail

Dear R.P.: Maybe I’ve missed something, but it seems to me that your financial adviser is an insurance salesman. Why in the world would you pay the rather high interest and fees, which are perfectly proper on a reverse mortgage and are desirable for many people, to produce a life insurance policy? Unless your assets are considerably larger than you’re describing, properly set up there would be no federal income tax at least for the next couple of years, and, depending on what Congress does about extending the death benefits, there may never be. Until such time as you know that, the only guy that benefits as I see is the insurance salesman selling a rather substantial life insurance policy. I would be very happy to listen to any arguments beyond those that you have mentioned here. I can see no advantage to anyone but the insurance guy.

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