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Planning—Other / Indexed Universal Life Questions
Nov 23, 2021
Indexed Universal Life Questions
I know some people who are choosing to contribute into an indexed universal life policy over a Roth IRA or an IRA. Look I don't know there has to be a trade-off, but I'm reading up on IULs and they seem interesting. Anyone have any experience with them? Is there a catch with such policies?
Replies (5)
D
Nov 23, 2021
@Charlie544, Not a good idea to do. I's like an annuity but with a much larger life insurance portion so not only are your rates of return lower (because you have to pay for that guaranteed income stream). Insurance is never a good "investing" if you know what I mean.
Nov 23, 2021
@Charlie544, I've come to learn myself that we older folks are so much more conservative and looking for some guaranteed income if we can! I understand why you would ask the question but a life insurance policy as a means to investing is so much more costly. Have you heard about the government savings bond called I bonds? They are offering a guaranteed yield of 7% on bonds issued for the next six months but those rates change every 6 months based on CPI from what I understand. I'm not an advisor by any means.
Nov 28, 2021
@RinaPLD, yes it is not easy to figure out. Interesting tip on the bonds. Thanks for that.
Nov 23, 2021
@Charlie544, I'm of the view that it's never a good idea to mix insurance and investing. Index funds work great for the latter! It may though be worthwhile to visit a licensed insurance broker who has access to various different types of policies to get the straight story on this. You also have to be sure you understand all the fees associated with such a product like surrender fees, sales commissions and the like.
Nov 28, 2021
@Andy497, I will do just that, thanks.