Common myths and misconceptions about IUL
January 22, 2025 by Drew Gurley
Indexed universal life insurance offers a unique blend of death benefit protection and cash value accumulation tied to the performance of a stock market index. However, as with other types of life insurance, there are several misconceptions that can hinder an agent’s ability to effectively sell IUL.
Wink’s Moore on the Market: According to Wink, Inc., in 2023, indexed life sales hit $2.8 billion.
Sales YTD 2024 are $2.1 billion.
And in case you wondered, Wink forecasts that indexed life will set another record for sales in 2024.
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In the interest of all the social media misconceptions about indexed life insurance, I would like to bring you seven misconceptions on IUL, according to Drew Gurley at Senior Market Advisors (844-452-5020):
1. IUL is a “set it and forget it” product.
2. IULs offer unlimited market upside potential.
3. IULs have guaranteed cash value growth.
4. IULs are only for wealthy clients.
5. IULS are a quick and easy way to build cash value.
6. Growth in an IUL is tax-free.
7. IULs should replace retirement accounts.
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I’d also like to emphasize #7, above, because:
“Some agents leverage the equity-indexed nature of IUL policies to highlight a “potential for higher returns” compared to other retirement accounts such as a Roth IRA or savings account. This is simply incorrect.
Just like a Roth IRA or savings account, an IUL should serve as a single component of a long-term retirement strategy when it fits within a broader financial plan. It should never be primarily positioned as a replacement for an existing retirement account solution.” -sjm