All Forum Posts by: Grant Moulden

First, if you qualify for a Roth and are okay with volitility and no guarantees, take it, just watch out for mutual fund or management fees as that 1-2% you pay annually gets you nothing. With the IUL, it'll at least get your family some life insurance. Once that $5k/yr contribution turns out to not be enough, then look at the IUL. I can't make myself clear enough on this subject. The IUL simply acts like a Roth IRA when we look at tax deferred growth and tax free income. Got $100k/year you want to get into a Roth? Good luck, IUL can handle it all. On to fees: Minimum Death Benefit is a must. But most buyers won't have a way to tell. If you are paying for the long term (annually for 6+ years) make sure your contribution matches the guideline level premium. If trying to cram a bunch of $ in ASAP and set it in cruise control, make sure you pay in the 7-pay premium.

Costs are associated with the death benefit, so less is better, naturally. However, carriers won't tell you that you only need a small amount of that death benefit to be considered "permanent" insurance, where as the rest of what you need to have in order to honor the miniumum death benefit can be considered "term". Term is the cheaper component. Agents don't get paid on the term part when it's blended into the IUL, only the permanent portion. Getting the drift? Fees are drastically reduced and this will be much cheaper than mutual funds over a 15 yr period.

Ongoing, the charges on the policy are directly related to the death benefit, not the cash value. Add up all the fees on a mutual fund over 30 years and compare them to an IUL and the IUL is a fraction. You have to be on board and want everything it does, not just cash. (i.e. no market loss, has death benefit, attracted to access before age 59.5, etc..) Don't buy it purely for any one reason. This should address your initial question.

Perhaps I should clarify Joe. I know this subject inside and out and am not personally reaping any monetary benefit whether you (or anyone else) do it or not. Note, my contact info is not listed as I could care less about generating traffic. Your choice: Listen to the agent selling it to you and reaping the potentially large comission or listen to someone who knows the tricks and secrets and then go buy it from whomever you want.

I started this thread to address this product specifically. As an advisor who has written over a hundred IULs and own two myself, I can lead you to the correct way to structure these and show you what to avoid. 99% of agents aren't doing the best job for the client and this only makes their paycheck fatter. Reality check: when structured for maximum cash accumulation, the agent makes very little off of the purchase. If you are considering this as a place to store cash and have questions, I'm unbias.

I have one and my wife has one. Just wraped up our third year in them and they are performing better than the illustrations we saw upfront. Regarding other comments below, the index account doesn't have any fees associated with it (like a mutual fund would inside a VUL). Only fees are the insurance related ones and when set up properly, they are as small as legally possible. I did tons of research before I bought and recommend you do too. A structural flaw by the agent can send the contract into a tailspin from what you thought you were getting. Contrary to what most people think, the way these are structured, if done correctly with a minimum death benefit, actually dont pay the agent much. (i.e. you put in $5k/year, agent gets about $1500 upfront and pennies each year after). When structured maliciously, the agent will pocket $5k in the first year... hence the need to make sure yours is structured right. The slight variance can mean a few hundred grand more in your pocket in 30 years and a much better vehicle to save money in. Find a local agent who you trust and has done dozens of these. Run the illustrations with him and ask him to see the "Target premium". Thats what he/shee will make. If it's anywhere close to what you are paying into the contract, it's not the investment you sought out for. If it's around 15-30% of the amount you are paying in the first year, you've got yourself a good agent and solid policy structure. Note: Minimum/Increasing death benefit is key for people who will pay into the contract for 7-10year or more. Level/Minimum is key for those who will stop funding after 4-5 years. If you plan on paying forever and get a Level death benefit, you aren't in as good as shape as you could be. Hope this helps!