Sounding The Alarm On Indexed Universal Life Insurance
August 2, 2022 by Ed Leefeldt and Les Masterson
For more than a decade, indexed universal life insurance (IUL) has been one of the life insurance industry’s most profitable businesses. New IUL premiums increased by 29% in the fourth quarter of 2021 alone, according to LIMRA, an industry-funded financial research company.
Wink’s Note: What?!?
Okay- there are 49 companies selling indexed life today.
The policyholder’s money never goes INTO the index.
They make it sound like the policyholder is the one buying the options that provide the index-linked interest on IUL, and that just isn’t so.
I’ve never heard of an insurance agent selling IUL as an “indirect way to play the options market?” Have you?
And as for one “insurer charges upwards of 8% of the premiums and cash value in the policy in the first year alone…That’s more than most hedge funds”- the policyholder IS getting life insurance coverage, in exchange for those charges.
Saying “a person could pay $367,000 over six years on an IUL policy and get nothing back if the policy is canceled” is disingenuous. You DID get life insurance in exchange for the premiums paid.
In short: I do think a lot of the statements they make in this article are fair, but there is also a lot of inaccurate information in it. -sjm