Indexed Universal Life
So, there is a guy that has a blog entitled "5 Reasons Not to Buy Indexed Universal Life Insurance," and we thought what a good opportunity it would be to address each claim one at a time. But, then I read the article and figured why bother. It is clear to me that he just does not get it. People that have experience in certain areas can certainly provide their point of view and their input. However, telling someone that only one type of financial product will fit (or not fit) with everyone's situation is the equivilent of an ice cream expert trying to explain to me what my favorite flavor is. It's an individual choice.
What's an IUL?
It is a FIXED cash value life insurance product designed to build cash value over time. It does not come with a premium guarantee (which I typically would recommend with a "UL" product), but if you are regularly reviewing your policy and not "under funding" the policy, you should be ok. And, if you are paying attention, you have alternatives to protect your policy in the future should the non-guaranteed elements of the policy change.
In my opinion, it is a good option as part of an overall strategy. I don't personally own this type of policy, but I DO own a UL policy, and it works well. A couple years ago, I needed funds and took it from my policy (through a loan) and ended up paying the funds back. What I really like about it was that I did not create a taxable event. Everyone also claims they don't like costs, but the government takes about a 1/3. What I also like about it is I'm also about 15 years into my 30 year term insurance policy. I have NO IDEA whether I'll want to still have life insurance when that policy ends. But, I will have options. Options that 60 year old me would not have if I made different choices years ago.
To describe all of nuances of the policy would certainly help your sleeping problem. So, let me explain it to you this way. I'm not a fan of whole life (except for small burial policies), because I see no opportunity in whole life. In an IUL, I do see opportunity. And, if the non-guaranteed projections in the illustrations come to fruition, you can look at it as about a 2% spread (cost) to get some life insurance for your familiy and pick up some of those tax advantages that you can read about just about anywhere. Life insurance is like politics. Neither the one side nor the other side is completely accurate. The solution usually lies somewhere in between.
Lastly, there is a right way and a wrong way to buy these policies. The question to keep in mind is, "How little of a policy can I get for $X per month?" Couple that with a term policy to make sure you have the right face amount for your family, and you're likely on your way to a pretty good strategy. You can request information information on our quote page, but please expect us to chat by phone before creating a proposal. You wouldn't want us to make you an ice cream without discussing the flavors and toppings first, right?