a friend of mine has a father who is an insurance broker, and I’m exploring life insurance options as I’m about to become a father.
I received a quote for a $500,000 plan that increases annually at $1,699 per year ($141 monthly). Should I go with an Indexed Universal Life (IUL) policy, or is term life insurance a better fit for me? I’m a 28-year-old male with a stable income well above the median for my area. I own a home, have a paid-off car, and contribute to a 401(k) and Roth IRA, along with other income streams.
I’m new to life insurance and have read that IULs can be considered a “scam” and may not be the best choice. However, most people are quoted over $5,000 a year, which isn’t the case for me. What do you think?
I recommend doing some research outside this forum before choosing an Indexed Universal Life (IUL) policy. They often underperform compared to term life insurance and regular investments. Many people here either get paid to promote IULs or may not fully understand basic financial concepts.
Maybe you should read the article before deciding what the link contains. It discusses IULs at the end. But you didn’t mention anything about the other link, did you?
I’m happy to explain where and to whom IULs are suitable, but my perspective will differ from most people here, and it will require a longer conversation.
Most people in this forum genuinely believe that IULs are a good investment, but they are not. The only valid argument I’ve seen is that many people lack the knowledge to invest wisely. However, I believe the solution is not to offer them a subpar product but to teach them how to invest properly.
Anyone claiming that IULs are good investment products either cannot sell investment products or fundamentally misunderstand financial planning and life insurance concepts. I sell many IULs and VULs to high-net-worth (HNW) and ultra-high-net-worth (UHNW) clients for guaranteed death benefits and estate planning, as they would never choose term insurance for those purposes. I can provide extensive examples of how these products mathematically benefit these clients and complement their business holdings and investment portfolios. While I understand your concerns, I think you’re making a sweeping statement that IULs are bad without considering the specific situations where they can be advantageous.
White Coat makes too many false statements about life insurance to be credible on the subject. I recommend watching the Life 180 response video to White Coat’s interview on Bigger Pockets about whole life insurance. Life 180 addresses every claim White Coat makes with actual facts and data. He has also invited White Coat to debate whole life live on his channel, but White Coat refuses. I wonder why that is.
Life 180 claims that the Roth IRA is one of the biggest failures in investing. Since the Roth IRA is widely regarded as one of the best savings vehicles ever created, I see no reason to take his opinions seriously. I’m sure White Coat didn’t respond because engaging with someone who is intentionally misleading isn’t worth the effort for an intelligent conversation.
A Roth IRA is not a savings vehicle; it’s an investment vehicle. There’s a key difference between saving and investing, and Wall Street has blurred those terms to make you think you’re saving when you’re actually investing. That said, a Roth IRA probably ranks just behind a 401(k). If you dig deeper, you’ll see it’s all part of Wall Street propaganda, which helps explain our current retirement crisis. I agree that it’s not worth the time to argue with someone who can’t think critically.
Stop relying on articles for advice. Many of the authors haven’t experienced it themselves, which makes their opinions questionable. Plenty of people have IULs and love them. It’s better to base your opinions on those who actually have them, understand why they chose them, and can share their experiences. Most articles are just theories without real proof. Talk to people who own IULs and see their results for yourself.