Why I Almost Never Recommend Indexed Universal Life Insurance
April 23, 2020 by David C. Lewis
A lot of investors, seeking a reprieve from the ups and downs of the stock market, have turned to a life insurance product called “indexed universal life insurance.” This type of life insurance is permanent life insurance, which builds cash values based on the upward movement of a stock market index. Premiums are paid, cost of insurance and other policy charges are deducted from the premium and accumulated cash value, and then the remainder of the premium and cash value is used to buy a mix of bonds and index options.
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Wink’s Note: Proceed with caution when someone talks about “investors” while discussing insurance products. Regulators don’t like that. The cap rate cited here is 50% of today’s average cap rate on IUL.
