Iul insurance reddit. For the uninitiated: What is indexed universal life insurance? This insurance, like most permanent life insurance products, has many different moving components. Only about 90-92% of the $ goes to the policy. . Apr 6, 2025 · IUL Policy Experiences (self. It provides lifelong coverage and includes a cash-value feature, which you can invest and use while you’re alive. Rest to the salesman. 1K votes, 213 comments. IUL, VUL, WL, UL, GUL etc etc. I would be paying about $250 a month. Insurance) submitted 1 day ago by Johnlorhmoob For those who have IUL policies, can you share your experiences so far? Both good and bad. The process is easy with our simplified underwriting and eApplication. I think IUL is a nice compromise like a mixture of 80% whole life and 20% VUL. Here's an excerpt from page 83 of Patrick Kelly's book The Retirement Miracle: Allow you to draw income in retirement tax-free Receive market-like returns with without any market risk Never take a market loss IUL policies are… complicated, to say the least. As with any financial product, for certain people, a cash value life insurance policy could make financial sense. true Though I would have qualified for inexpensive term insurance (<$20/mo) I began contributing $100/mo into the Universal Life plan, thinking I was doing myself a favor and saving up for retirement. The financial advisor went heavy with life insurance for my wife and I. I've been paying into an indexed universal life insurance policy since 2012 and wondering if it's worth it to keep at it or surrender it? 1. You also don't discuss why you wouldn't just get a simple insurance product (term life insurance) for significantly less than an IUL - I for example pay $637/year for a 30 year term $1m policy. Just don’t use this agent pitching you on canceling both and that IUL “can’t lose money” b/c it absolutely Complex insurance products exist to 1) enrich the insurance agencies/their employees 2) help people with complex insurance needs, aka the 1%. Feb 13, 2026 · Indexed Universal Life insurance seems safe and profitable, but high costs and limited returns make it a poor investment for most people. The rest I lean toward IUL given its flexibility and higher upside potential than WL and it’s downside protection compared to VUL. Find out how much TERM LIFE is for the life insurance value. We still have other family around who could probably help out (maybe not financially, but for other things). They claim to be investment and insurance and they are. Indexed Universal Life Insurance, or an IUL, is a hybrid insurance product that seeks to combine the benefits of life insurance and investing. The pros and cons of IUL are often sensationalized and exaggerated by both promoters and haters. However, I've been investigating the possibility of an IUL policy for the following reasons: Compared to traditional retirement accounts, Indexed Universal Life (IUL) insurance policies, with or without premium financing, reduce significantly investor flexibility, wealth, and retirement income. I think it is a great IUL. IUL, Whole Life, Universal, etc are all very poor choices for 99%+ of the population. I would then continue to make monthly payments into this new IUL. Learn benefits and growth. Indexed Universal Life Instant Decision IUL from Americo Financial Life and Annuity Insurance Company is an Indexed Universal Life insurance policy designed to provide your clients with permanent life insurance coverage. If you dig into what indexed universal life is, it’s essentially a term life insurance account funded by a cash account that is invested in options contracts. I have yet to find a scenario where an IUL is the ideal product. Indexed universal life (IUL) insurance is a type of permanent life insurance. there are more efficient ways to accomplish the objective that the life insurance salesman thinks an IUL can accomplish. The IUL will also hold my money in my dynasty trust I plan on setting up for my hiers. While your “crediting rate” will never fall below 0%, in the years where that happens, you will still need to pay for the cost of insurance (either with your premium or out of your cash value). Learn the pros and cons of this whole life insurance policy, compare rates from the top providers with a 100% FREE quote tool, and more. Invest the amount Y into the S&P 500 index fund, You will be better off. Explore the key pros and cons of Indexed Universal Life (IUL) insurance. Learn more now. Indexed Universal Life (IUL) insurance policy. What's the catch? I need some Reddit scrutiny. You pay the premiums and if you die during that term, your beneficiaries are paid the amount of the policy. If you get sick, it's not too late to want life insurance, but it's too late to get it. Indexed Universal Life is a scam I think that shouldn't even be sold. I recently set up an Indexed universal life account. An indexed universal life insurance or IUL policy can provide for your retirement, insurance, and investment needs. This is typical and what most investors recommend. Allianz IUL is the one I picked. IUL accumulates cash value, Term policies do not and most term policies get you nothing at the end of the term, unless you die, somebody else gets the death benefit. To see what’s up with indexed universal life (IUL) investments and find out the best way to cover your life insurance needs, read on! Discover the best indexed universal life insurance companies, understand IUL benefits, tax advantages, and potential drawbacks before investing in this powerful financial tool. I was not well-informed or financially prepared to purchase life insurance. Good or bad? I'm 29 years old with $300,000 annual income. I have a traditional whole life insurance policy. My insurance agent sent me some info on an IUL policy. Discover the truth behind the indexed universal life lawsuit: learn about claims, allegations, and settlements in this informative article. Term life insurance is a policy that you buy for a specific term (like 10 years). Life insurance and annuities have tax advantages over a brokerage account - so sometimes they make sense. Indexed universal life insurance uses your premiums to pay for a death benefit and a cash value account tied to an index fund, but high fees will cost you. To cover these risks i’m thinking about opening an IUL account, and use the cash value and take their loan as an emergency loan to pay for mortgage and fixing costs. But I always had a nagging feeling that the value of the Indexed universal life (IUL) insurance policies have a cash value that's tied to the performance of the stock market. The first big thing to understand is that you can, in fact, lose money with an IUL. Indexed universal life (IUL) insurance ties cash value growth to market indexes, offering potential for higher returns than fixed-rate policies. May 30, 2024 · Our financial advisor brought up an IUL as a seemingly wonderful opportunity to "invest" in what is supposedly a tax free "insurance" policy. At year 9 you would have paid in $8000 and would have $6300 in cash. It performs poorly as both life insurance and an investment against other forms of life insurance (IE term) and other investments. If you are just wanting to do insurance to get insurance and want permanent coverage a WL 20 pay might be a better option unless you structure an IUL properly and are conservative with the numbers. Why do Reddit users consider IULs a bad investment? Many Reddit discussions highlight concerns regarding the fees associated with Indexed Universal Life policies. We were quoted extremely good growth rates and the ability to pick and choose as to annual premium payments and number of years to make such payments. on #2 above - as you are buying an insurance product, charges to pay for your coverage and insurance company expenses and profits eat away at investment growth potential. What age and yearly income is best for an indexed universal life policy? I currently have an IUL policy with a death benefit around 100k and spend $77 per month Agent - "Year 7 you will have paid in about $6000 and will have $3400 in cash. My question would be, “why would you start an IUL instead of buying term life Insurnace (assuming you have a need) and buying index mutual funds directly vs through an IUL? Is the goal life insurance protection? Is the goal investments? Be careful what you get into. But index funds are much better investments and term life is more insurance for the dollar. In my current financial situation, I realized I made a mistake purchasing IUL. In fairness to the BTID crowd, there is a lot of similarity between IUL and BTID. Somewhere on your illustration you should see a column called Cost of Insurance. We take a deep educational dive into IUL's good and bad qualities as well as who should buy Indexed Universal Life insurance. Indexed Universal Life Insurance (IUL) Sounds Like a decent investment, any drawbacks I should know about? I was approached to move my Roth IRA contributions to an IUL Insurance plan. As an investment alternative at your age VUL is much better than IUL. what is the Life insurance value of this Indexed Universal Life which is just a Whole Life Policy. It's a product designed to be sold, not bought, even more so than any other cash value policy. While it might, there are better options for you. Cost of their insurance $78 - term life cost X = Y. We definitely plan on getting Term Life Insurance to cover us in case one of us passes unexpectedly. I wouldn’t jump to throwing it away, especially since you don’t have a need for the money now Has anybody else read this? Edit2: After hours of reading sites like Investopedia, reddit posts, and this unbiased article, I decided to cancel my IUL policy and minimize my losses. With that 10k, at the guidance of my financial advisers and the CEO of the company they said that I should put 5k toward an indexed universal life insurance (IUL) policy. I don't know what to ask the guy who is trying to sell me the policy. Reasons why I like the idea of an IUL are because of the tax-free payouts, I can take a small loan against it, I understand I cannot lose money and there is an opportunity to gain money so it seems relatively safe, especially if I don't take out a bunch of loans against it. Explore IUL insurance in 2025: a step-by-step guide to Indexed Universal Life for tax-free retirement and estate planning. This will allow the next 3 generations or more to utilize the family bank. IULs participate in the market, but not like 401Ks. I started out with a IUL and after a year realized I could end up with nothing for a benefit so I switched to traditional whole life. We did the math—in excruciating detail—to prove it. I’m paying $180/month for an IUL with a $250,000 death benefit but the agent is insisting that this is a good IUL because it has living benefits such as critical illness, long term care and terminal illness benefits so even if I don’t die I can get benefits. If I cancel the indexed universal life policy, we'd lose $7k, but if I keep paying it, eventually my premium will come back, and my parents would still get a $250k death benefit if I die. I am 26 years old and have had a IUL through Transamerica for about 2 years now. You might be able to get a little better cash value early with the IUL, but I would expect better performance long term with whole life, especially later in life when the cost of insurance is higher with IUL. The rest is gains and is taxable. I'm setting up a 10 and 20 year laddered term life insurance policies, and she suggested doing an IUL policy instead of a 30 year policy. Every year I'd get a statement showing how much I'd saved up, and how much my savings had grown with the market. Read now. This is true using historical & projected capital market performance. I allocate anywhere from $400 - $300 per month every month into the… In short, get the cheapest DB protection need taken care of with term coverage in the near future. Problems with IUL: High commissions up front. The idea is the increase in the “options” account will grow at a rate such that it will outrun the costs of the insurance, and provide a nice tax free nest egg. You need advice from a non salesman For example. Just buy term insurance and shovel the balance into an index fund. However, the complexity of IUL products often leads to misunderstandings about fees, potential growth, and the actual benefits they provide compared to other investment vehicles. Yes, IUL premiums are more expensive because part goes to paying the life insurance portion and the rest goes to cash accumulation. The idea is that when I retire, this will help supplement my insurance. Indexed universal life (IUL) and whole life are two different products. But the Financial Advisor was heavily pushing a "Indexed Universal Life Insurance" through Nationwide. Learn when IUL makes sense and common mistakes to avoid common mistakes. It would be for a $250k policy. If you are going to BTSD, you probably will underfund your IUL and have your coverage lapse before you die anyway. Caps and participation rates limit gains, but Is IUL a good investment? Compare $75k in fees vs $280k in taxes over 30 years. I have been investing $50,000 per year into a SEP-IRA (index funds with a 90/10 stock/bond mix). Should I surrender indexed universal life insurance policy? Reposting here from r/personalfinance: Family friend sold to me when I was 21 and I've been paying $100/month for about the last 7 years now. Learn about tax advantages, flexible premiums, market-linked growth potential, downside protection, and how IUL compares to whole life insurance. Life insurance and annuities are sometimes the right financial vehicle - not always. I could go into details why I think it is very good. The account seems amazing It is far from amazing. If you want "stock risk" in an insurance wrapper, I prefer the relatively straight forward VUL product to all the IUL garbage. Indexed Universal Life (IUL) Insurance sounds too good to be true. Life insurance is not an investment; Life insurance is a way to mitigate catastrophic risk. Unless you're extremely wealthy and trying to bypass the estate taxes, universal life is not usually a good fit. If you want to do infinite banking, it is much better with IUL than VUL. r1k3n, z2ogc, yngg, aygp1, q7vke, 5owjq, 22y9, tm9oh, eia5gy, mtfx,