What is your opinion of an IUL - Indexed Universal Life Insurance?
Hello Anonymous. The answer will depend on a number of things, but the short answer is that I have a high opinion of IUL. But that is because the set of reasons that I bought such a plan for myself fits my expectations - and the moving parts are not beyond my understanding. It is often the case that with life insurance the best way to get it wrong is to assume that because it works for someone else it will work for you. Add to that an insufficient level of understanding of the moving parts and you have the recipe for potential disappointment.
My situation is this: I had enough life insurance for practical death benefit reasons when I bought the IUL for myself, so that tells you that I was not trying to improve my death benefit. I was trying to improve my cash accumulation, and it is nice that there is a death benefit to go with it. Second, I wanted a "no loss" kind of investment, and the indexing feature has that advantage. I wanted to have a cash pile that I could borrow from if I wanted to, and that is how it works. So now - and this is a super brief set of items that fits my situation - I now have about a 9% interest rate on the policy and the cash is growing. If I live I get to use that cash, and if I die, my wife gets to use THAT cash.
The moving parts: yes, there are quite a few, but you drive every day and there are quite a few moving parts in your car, too. Get to know the moving parts in IUL and that way you will know what's behind the dashboard. Want more info in a non-pressurized dialogue? Send a message through my profile and we can kick the topic around until you have a better sense of the product. Hope that helps!
LifeInsuranceToday.US | 06.09.16 @ 20:31
I think IUL is another tool in the box. It is not for everybody, but will fit some situations. As with any insurance product, you should compare it with other types of coverage to see if it meets your goals and needs. | 06.12.16 @ 05:37
If you are lucky enough to qualify (i.e.. you have a life insurance need, you have the money to max fund a policy, you are healthy, you are at a favorable age, and you have completed some type of Financial Needs Analysis) it's usually a fantastic plan to have as part of your portfolio.
Unfortunately, our company believes that only about 15%-20% of the entire American population should ever really consider one. It's just that difficult to qualify. | 06.14.16 @ 20:36