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Ok, so IUL's have gotten my attention ...
- Thread starter DayTimer
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- #123
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And just as defiantly, I continue to grow more and more skeptical of the UL family of products with each passing day.
Universal Life Insurance
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It's still a funding issue, rather than a product issue. 
GUL is vastly different than current assumption UL, VUL, or IUL.
I know that you know this but for anyone else reading...
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- #126
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It's still a funding issue, rather than a product issue.
If the insurance company won’t guarantee the cost of insurance through maturity, how is that a funding issue?
Yes, and I should be more accurate when I post, so thank you for pointing that out.
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It's still a funding issue, rather than a product issue.
Very true, but this is the issue with all insurance products. However, when funding as an issue claims the life of simple life products, it is in my humble opinion, the loss of simple face. With investment style products though, the loss can become far greater, and the loss of face and cost of investment monies far out strip what might have been lost in the simple promises of more humble products.
But I am sure we might differ on that point, however keeping to a more amicable disagreement than might be exhibited on the FE forum.
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If the formula for all life insurance policies is...
Net Death Benefit = Cash Values + net amount at risk - any outstanding loans
... and the costs of insurance is limited to the net amount at risk... then all we have to do is close the gap so there's more cash values earning a return than net amount at risk having an increasing cost that eats up all the cash values.
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- #129
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Tom Love has an IUL presentation that is pretty convincing (convincing to me at least) that IUL is at best an accumulation vehicle, but because the cost of insurance in an IUL is a future unknown that will increase, and since the illustrated values are based on actual not average returns, the IUL will not survive the trip down the other side of the mountain, i.e. it will not work as a distribution vehicle as illustrated. If we go back to my first post in this thread, what got my attention was the way the IUL was illustrated as a distribution vehicle. I am not comfortable offering it to my clients as a solution to tax free cash flow in retirement.
Like we've discussed before, if the client realizes the risks and can shoulder that burden, it can be a great option.
For most (and the way it is often sold) it is not a great option.
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