Index universal life insurance

[ZzzPlz]

---

Members do not see this ad.

I've been hearing some chatter about index universal insurance lately. I've read up on it but I'm pretty naive to investing. Seems like lots of claims about loss prevention (albeit with gain caps) and tax free withdrawals at any time might be too good to be true. I figure there must be some substantial fees and high premiums and some other catch that I'm missing.

Anyone have any thoughts? I've always heard that term life is the way to go for insurance and your investments should be separate.

I'm fresh out of residency and have a wife that stays home with my young children if that helps 🙂

Thanks

 

[BLADEMDA]

http://forums.studentdoctor.net/threads/variable-universal-life-insurance.1136051/

http://forums.studentdoctor.net/threads/massmutual-whole-life.1188645/#post-17562995

http://forums.studentdoctor.net/threads/life-insurance.909600/#post-12483639

 

[sethco]

I got one too...

http://whitecoatinvestor.com/stupid-doctor-tricks-biggest-financial-mistakes/

 

[ZzzPlz]

Haha. I found some white coat investor articles after a couple pages of google searches once the ORs calmed down tonight.
Thanks again

 

[cincincyreds]

You will be sorry if you buy an cash value life insurance such as index universal life insurance. The reason I'm sure you bring this up is some life insurance agent, probably a family member, is knocking on your door.

Whitecostinvestor does a pretty good summary why this product is lousy. You are best of buying term life insurance and investing the rest in a low cost indexed mutual fund through Vanguard.

The first problem is the cost. The cost of the life insurance gets more expensive each year which increases your risk of lapsing the policy and ending up in a tax situation.

The second problem is you DON'T get credit for the dividend

The third problem is they cap what you can get credited for each year and they CAN change the cap to benefit themselves.

There is no situation where this product will work. I promise you.

 

[deleted547339]

You shouldn't need like insurance when you're old.

Term like insurance is cheap.

A bad investment will make more than a cash-value life insurance.

If a financial advisor suggests this, he or she has showed their hand as someone who has the goal of taking your money, not helping you build wealth and your relationship should be done.

 

[caligas]

Haha. I found some white coat investor articles after a couple pages of google searches once the ORs calmed down tonight.
Thanks again

Start working on reading through his whole website, or at least his book.

 

[BLADEMDA]

Not all Cash-Value Life Insurance policies are bad products: https://www.nerdwallet.com/blog/insurance/life/life-insurance-gurus-love-tiaa-creff/

This company is low cost and all fees are disclosed up-front.


http://articles.chicagotribune.com/...ife-insurance-traditional-whole-life-policies

 

[BLADEMDA]

http://www.foxbusiness.com/features/2013/01/17/six-common-myths-about-buying-life-insurance.html


http://forums.studentdoctor.net/threads/variable-universal-life-insurance.1136051/

The link above is great thread on this subject matter.

 

[IlDestriero]

The best argument I read for these type of policies was as a component of estate management for the extremely wealthy. >$10m. Very few physicians will fall into this category. I think most of the folks that support it own it already and are justifying their purchase. It's like people recommending anesthesia as a career.


--
Il Destriero

 

[BLADEMDA]

The best argument I read for these type of policies was as a component of estate management for the extremely wealthy. >$10m. Very few physicians will fall into this category. I think most of the folks that support it own it already and are justifying their purchase. It's like people recommending anesthesia as a career.


--
Il Destriero

Ouch!

 

[MD Financial Services Scott]

If you decide you really want to look at it make sure that your agent shows you a plan without a surrender charge so that if you get into it and it does not perform as desired you can cancel it without a big financial hit. Most reps have the ability to make the plan without a surrender charge but most don't like to do it because it pushes down their compensation. Please be mindful that No or Low surrender charge does not mean no fees....at the end of the day you are buying a life insurance policy that has a 50+ year duration of exposure (not just a 10 year term exposure) so you will be paying for the carrier taking on your mortality risk.