I would not feel safe telling my children to hit a bully. What if they hit too hard and there is an accident? Or (more likely with my dc's!) the bully happens to be stronger and hits back harder? No gain there, then.
Fortunately, the issue has never arisen as both schools my dc's have attended have really strong anti-bullying policies. Any verbal bullying and the children would know what to do (tell an adult). They have been trained to look out for each other. And the adults in the school have all been trained in how to stop undesirable behaviour. Any bullying relayed to me, and I'll go into the school and talk to the teachers, who (IME) will react immediately.
This has happened very rarely to my knowledge, but when anything has occurred, the school has been very proactive and something has been done.
My point is- I know not every school does this. But it is what they should be doing, and if they are not, then you as a parent have a right to know why. Ask to see their anti-bullying policy. Demand to know what they are actually doing in any specific situation. It is part of their job. Don't let them off the hook!
Besides, hitting out against verbal bullying isn't really a life skill, is it? What will happen if you do that later in life? In the office? On the shop floor? We all know that there are workmates (or bosses) who indulge in verbal harrassment, but we really haven't got the option of punching them!