Indexed Universal Life Insurance (IUL)

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LoGiK
Posts: 122
Joined: Mon Jul 30, 2012 7:59 pm

Indexed Universal Life Insurance (IUL)

Post by LoGiK »

During work today, the water cooler discussions turned into investing. One individual mentioned he doesn't use TSP/IRA but instead uses a IUL. He said we should check out the article below.

http://www.thinkadvisor.com/2014/12/09/indexed-universal-life-its-just-a-great-investment?migration=1

What do you think; good or bad? I read it and it does seem interesting
No clue what I'm doing, but willing to learn.

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cswift01
Posts: 819
Joined: Thu Dec 08, 2016 10:46 am

Re: Indexed Universal Life Insurance (IUL)

Post by cswift01 »

LoGiK wrote:During work today, the water cooler discussions turned into investing. One individual mentioned he doesn't use TSP/IRA but instead uses a IUL. He said we should check out the article below.

http://www.thinkadvisor.com/2014/12/09/indexed-universal-life-its-just-a-great-investment?migration=1

What do you think; good or bad? I read it and it does seem interesting


Is this similar to buying an annuity? If it is, I wouldn't suggest to do so. You can get similar returns and control your own money too.

Best,

Me

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LoGiK
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Re: Indexed Universal Life Insurance (IUL)

Post by LoGiK »

What I find intriguing is the guaranteed floor. Even if its only 1%, in a year where the market tanks, you're still guaranteed at least 1%. Though it does suck for those explosive years when you hit your ceiling....
No clue what I'm doing, but willing to learn.

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evilanne
Posts: 1886
Joined: Thu May 14, 2015 6:52 pm

Re: Indexed Universal Life Insurance (IUL)

Post by evilanne »

It sounds good but suggest you do more research. I don't know if you get the same tax advantage of investing in traditional TSP, especially considering TSP 5% match. If you decide to go that direction, recommend you read the fine print to make sure there aren't any hidden fees, that you understand how they determine any return & their ability to change it, and what penalty there is for termination or early withdrawal. see http://www.investopedia.com/articles/pe ... urance.asp

There are other insurance products based on the same principle but sounds better than IUL. I've gotten 2 free dinners to listen to the sales pitch but they didn't have the life insurance aspect or varying premiums. It was more of investing a certain amount of money for certain period of time, no losses and earnings tied to market. Some even included an upfront bonus.

mindofmush
Posts: 353
Joined: Mon Jul 02, 2012 1:38 pm

Re: Indexed Universal Life Insurance (IUL)

Post by mindofmush »

It would be silly to give up 4% Gov contributions into TSP by not contributing anything towards the TSP while you're employed.

But after separation, it is a good thing if you want someone else to watch over your money.
mo meng, mo ching (which loosely means: no money, no life)

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WildBill
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Joined: Mon Dec 12, 2016 6:06 pm

Re: Indexed Universal Life Insurance (IUL)

Post by WildBill »

mindofmush wrote:It would be silly to give up 4% Gov contributions into TSP by not contributing anything towards the TSP while you're employed.

But after separation, it is a good thing if you want someone else to watch over your money.


Agree.

Scorpio70
Posts: 432
Joined: Thu Dec 24, 2015 11:49 am

Re: Indexed Universal Life Insurance (IUL)

Post by Scorpio70 »

I hate universal life insurance as a rule. You would be better off buying term FEGLI, and putting all your money in G fund the match if fear is a paralyzing factor.

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LoGiK
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Re: Indexed Universal Life Insurance (IUL)

Post by LoGiK »

WildBill wrote:
mindofmush wrote:It would be silly to give up 4% Gov contributions into TSP by not contributing anything towards the TSP while you're employed.

But after separation, it is a good thing if you want someone else to watch over your money.


Agree.


Can't be silly to give up 4% if you don't receive matching in the first place :mrgreen:
No clue what I'm doing, but willing to learn.

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evilanne
Posts: 1886
Joined: Thu May 14, 2015 6:52 pm

Re: Indexed Universal Life Insurance (IUL)

Post by evilanne »

LoGiK wrote:Can't be silly to give up 4% if you don't receive matching in the first place :mrgreen:

They are working to give the military the same option as FERS employees...but of course there are trade offs that may make it less desirable. If you are CSRS, you already have a better deal than everyone when you retire.

Scorpio70
Posts: 432
Joined: Thu Dec 24, 2015 11:49 am

Re: Indexed Universal Life Insurance (IUL)

Post by Scorpio70 »

My old boss retired after 37 years, she had switched from CSRS to FERS like a good little Gov Employee. She told me she would like to punch the people that talked her into it.

jethro
Posts: 18
Joined: Thu Jan 05, 2017 10:31 pm

Re: Indexed Universal Life Insurance (IUL)

Post by jethro »

Scorpio70 wrote:My old boss retired after 37 years, she had switched from CSRS to FERS like a good little Gov Employee. She told me she would like to punch the people that talked her into it.


Ouch. I don't blame her.

Duval
Posts: 19
Joined: Mon Dec 19, 2016 1:12 am

Re: Indexed Universal Life Insurance (IUL)

Post by Duval »

jethro wrote:
Scorpio70 wrote:My old boss retired after 37 years, she had switched from CSRS to FERS like a good little Gov Employee. She told me she would like to punch the people that talked her into it.


Ouch. I don't blame her.


Man alive, that's crazy.

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Fund Prices2021-05-07

FundPriceDayYTD
G $16.58 0.00% 0.43%
F $20.72 0.00% -2.27%
C $63.32 0.75% 13.24%
S $82.16 1.32% 10.72%
I $38.76 1.29% 9.51%
L2065 $13.84 1.02% 11.49%
L2060 $13.84 1.02% 11.49%
L2055 $13.84 1.02% 11.49%
L2050 $28.21 0.84% 9.30%
L2045 $12.88 0.79% 8.73%
L2040 $47.05 0.73% 8.19%
L2035 $12.44 0.67% 7.54%
L2030 $41.46 0.61% 6.91%
L2025 $11.77 0.48% 5.47%
Linc $22.89 0.23% 2.76%

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