FAQ
The most commonly asked questions and their answers.
An IUL is an Indexed Universal Life policy, which can outperform your 401k. According to an article entitled "Juicing Your Life Insurance" published by the Wall Street Journal in 2010, it’s “This year’s hottest life-insurance product …well-suited to an era of sudden ‘flash crashes’ and overall uncertainty: it appeals to people eager to capture stock-market gains while avoiding undue risk.” It gives an individual an option to enjoy gains when the market is up without any risk of loss during times when the markets are down.
There are many reasons why people don't do this. Not all of them are good reasons and others are valid.
"Bad Reasons" Not to do an IUL
1. Retirement planning is hard work and can be complicated and intimidating. It's easier to just stick with a 401(k) or IRA because “everyone” is doing the same thing.
2. Advisers recommend alternative strategies or plans because they make more money when they put you into something different.
3. Fear of the unknown or unfamiliar.
4. Hesitancy to give up the tax deduction received when you contribute to your 401(k) or IRA.
5. Enticed by employer match.
Valid Reasons Not to do an IUL
1. Ineligible because of health issues
2. Lack of ability to build up the cash value needed to achieve the best possible rate of return.