Indexed Universal Life Insurance Explained (IUL)
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- čas přidán 24. 05. 2021
- Indexed Universal Life Insurance is a blend of term insurance and an investment vehicle.
This is a comprehensive video on the workings of Indexed Universal Life Insurance.
Watch + Learn how a universal life insurance policy works, how the Death Benefit and Cash Account values perform, the details on the flexible premium payment option and also other options available within a IUL product.
Fees are typical with all insurance products. IUL product fees can be a little complicated. Watch and understand how fees are applied to Indexed Universal Life Insurance.
Brought to you by:
Life Benefits Insurance Agency
www.life-benefits.com
702-660-7000
Does nothing but dump on iuls then explain how Disneyland was made?!
You done a great job explaining all important points. Good work!
This video is misleading on several points.
Why are IULs are garbage:
1. Money never enters the market - With an IUL, the money
funding the cash value portion of the policy is never
actually invested into the market. Instead, the insurer holds
your “cash” and pays a return on the annual growth of a
specific index. Anyone selling IUL are not required to have a securities lic.
2. Growth potential is capped - While most policies have
a “floor” of 0% which prevents your cash value from
dipping below what you put into it, your growth potential
is capped, too. For example, if your policy limits growth
to 10% on the index and that index out-performs that
percentage, you’ll still only receive the value of 10% in
your account. The insurer keeps the difference.
3. No dividends - Dividends are completely eliminated in an
IUL policy. Not having the chance to reinvest any earned
dividends, as you could choose to do with an individual
investment, means you could miss out on a great deal of
money from dollar-cost averaging over time.
4. Fees, fees and more fees - IUL policies are packed with
fees and charges that will eat into any cash value accrued.
5. Rising costs - The internal cost of insurance continues to
rise as you age, which can limit the amount of money going
toward any potential cash value. All universal life is A.R.T ( annual renewable term)
PLUS: Almost all cash value policies have these
“features” built in.
• You’ll accumulate NOTHING in cash value for the first few
years the policy is in force.
• The cash value earns a lower rate of return (often just
2%-4%) than the potential return you could achieve if you
put your money into a vehicle such as a Roth IRA in the
U.S.
• If you borrow from the cash value, you’ll pay it back plus
interest.
• If you die with the policy in force, beneficiaries receive
the death benefit (less any outstanding cash value loan
balance) while the insurer keeps any accrued cash value. Unless you have the increasing death benefit option ( option b) the consumer will pay more for that option. The consumer always gets screwed when investing in these policies. The only winners are the agent and the company $$$$
The Bs I hear all the time is it has to be "structured properly" I have collected 64 policies in the last year and I haven't I seen one structured properly.
I just received an IUL and after reading your write up, I will have to pass on the “investment”, Thanks!
yes, except this person is quite wrong! Because most agents don't know how to set it up correctly@@TigMan-51C
My friend just got a job with one of the most popular IUL companies and wants my husband to stop investing in his 401k and get an IUL. She said she's getting her kids one so they can be millionaires by the time they're 50. I said this sounds too good to be true, and I haven't made an appointment with her to discuss. Every time I bring up the issues I've heard about an IUL, like this video and your comment mention, she too says, it's all about the way she structures it. I don't think we'll be getting an IUL. I kind of feel bad that she feels so strongly and secure in her business. It seems to me they're ultimately robbing ppl, and this is unethical.
@@crochethooksandbooks You don’t need a friend like that. Sadly, far too often, the love of money takes over the friendship role. Just remember, the word, “No” is a complete sentence. No explanation needed.
Great explanation! That a boy!
ai video?
What policy would you advise?
JeVaughn,
Whole Life and Term insurance (or a combination of both) are usually best for providing high amounts of cash value along with a good death benefit. These are the only kinds life insurance we personally own, as well.
If you would like to look at what a policy could look like in your specific situation, please contact our office. We'll be happy to design you a policy that works well for you. 702-660-7000 team@life-benefits.com
How is WL better? If u borrow from it u have ti pay at least %8 when u pay it back. Plus if u die the ins company don’t give u the cash and the death benefit m. U only get either or and they keep one.
this guy dumped on IUL policies to promote his own policy and what he is said is not accurate, these people get on here and look at you and lie to youin the face to try and steer you into another product. Put it this way, in 2022 carriers wrote more IUL policies than whole life, term life or variable life.
So true! It’s not really equity if it can (and often does) get pulled to plug bleeding holes! Nice comparison!
I don’t want the premium going up!!!
IUL is hot garbage. It shouldn't even exist. Great video!
How come ?
Your saying that a iul's upside potential with downside protection is hot garbage ? . Explain please 🤣
Improperly structured IUL is hot garbage. Properly structured and funded policy reducing death benefit over time is a pretty damn good policy, especially after the new 7702 changes!
@@Bryan-om3wq Just another “buy term invest the difference” fallacy all wrapped into one apparatus with even more ways to lose than just buying standard term and buy-pray-hold gamble on having something for retirement. It’s just another shiny object to sell you on not creating real guarantees on savings, then not being in charge of your investing subsequently. Do you really think an insurance company can give you better returns than their annuities, then wrap in all the moving and movable parts and fees? Nope!
@@christopherruiz9514 Well you didn’t watch the video, or you... well I digress.
@@Andy-wo9bm buy term and invest the rest typically lands into a tax issue, or a variable market issue. IULS are causing brokerage companies to compete. There’s a lot of talk of accounts now offering floors and ceilings just like an index. I’ll take a bet vs anyone who’s willing to sign a contract. Select an equal amount to fund a policy. I’ll take IUL and they can take the par whole life, most cash accumulated at the end of the agreed upon term takes ownership of both policies. At the end of the day most people just say IUL hasn’t been around long enough, well Atari was cool back in the day, but it doesn’t hold up to a PS5 Nowadays. Just because something is newer doesn’t mean it hasn’t evolved into a more efficient vehicle.
What policy is good then?
We personally own, recommend and sell Term and Whole Life Insurance. Check out this video explaining how each type works: czcams.com/video/q7QmPQvRIgE/video.html
@@McFie-Insurance I can sell you term and whole life and IUL and IUL is the best thing going, its why the rich use these policies. This guy is another dope misleading people to try and sell his product. More people took out IUL policies than other form of life insurance in 2022, and that is a fact and that should tell you all you need to know.
What are you talking about? Just to throw an example out… Mutual of Omaha‘s IUL is permanent insurance. The video is well produced but I don’t think you’re giving out correct information. I’d love to see you do a video and speak to the permanence of this policy. I never noticed anything about a term in my reading up on indexed universal life.
While your video is mostly true, you missed the most SIGNIFICANT moving part of a properly managed IUL! IUL’s cash values are supposed to function as and are essentially SELF INSURANCE! After you’re done funding the policy and when you get older, you’re supposed to REDUCE your death benefit to minimize the delta between your cash value size and your death benefit. As you age the tax codes let you to continually reduce that delta until there is no delta and NO Cost of Insurance as the Annual Renewable Term Cost of Insurance is ONLY based on that delta. So your cash value within your IUL and all its associated tax benefits essentially becomes your death benefit and the policy becomes SELF INSURANCE!
So you recommend max funding it 🙄🙄
@@Interstellar987 You just need to actively manage the delta/NAR between the DB and the cash value to the lowest allowed amount by the IRS. That’s the key to making IUL’s work like they’re supposed to with the ART getting really expensive as we age.
@@michaelmcmann9402 Any video or illustration on how to do that?
@@Interstellar987 It’s not hard. I review the policy every year with my agent when I receive my annual statement and we then contact the insurance company if we need to make any material changes to the DB.
@@michaelmcmann9402 what happens to the cash value when you die?
It was understandable just learn how to talk with your arms too.. I would look better
So wrong…not a term
What about the rising fees and premiums?
The tone of his voice says says , depression 😁
Stay with whole life!!!
why, so that everything is fixed, the insurance premiums are higher, and you get a lame 2 percent annual return on your cash?
precisely@@user-ht7po9ss8z
Sounds too expensive.
To many fee!!
All wrong
This is not true. IUL is a permanent policy not Term. The first thing you learn when you get a license is the difference between a term and permanent policy. A universal life policy; similar to a whole life policy are both permanent policies; which is completely different from a term. This information is wrong from the beginning.
Hello Drea,
IUL is technically classified as a “permanent” product but it is based on term insurance which, as you know, is temporary insurance.
This means the cost of insurance in an IUL policy always gets more expensive.
Premiums paid on an IUL policy do two things:
Buys death benefit
Funds a cash account with money left over from buying death benefit
The idea behind IUL is to have the cash account mirror an index and earn enough to cover the rising cost of premiums. For a period of time this might happen but it won’t be able to keep up with the higher premiums in the long run.
As the premiums take more and more money from the cash account, the cash account gets depleted to nothing.
At this point the policy owner can either pay for the death benefit at exorbitantly high rates or stop paying the premiums all together, which causes the policy to lapse. Except with guaranteed non-lapse IUL policies ALL IUL POLICIES WILL LAPSE AT SOME TIME.
So while IUL may be classified as a “permanent product” it is based on and performs like temporary insurance.
It’s Annual renewable Term with a cash value portion added to it.
I HAVE A GREAT BUSINESS OPPROTUYNITY 4 U
NVM