top of page
  • Writer's pictureDavid H. Kinder, RFC®, ChFC®, CLU®

Some concerns about IUL: Podcast Episode 1

There is a lot of talk and posts about IUL out there, particularly on social media. Normally, I wouldn't use an acronym, but awareness of Indexed Universal Life is greatly increasing so I'll use the 'street term' of IUL. I have three major concerns regarding IUL when used for retirement cash flow:

  1. Performance risk of the policy.

  2. Using "wash loans".

  3. Purpose and use of overloan protection riders with IUL

I have a lot of insurance agents that read this blog, so I'll be providing plenty of caveats in my descriptions.

First, we need to look at the economic forces in a cash value life insurance contract. We do this through the calculation of the net death benefit.

Net death benefit = Cash Values (and its earnings) + Net amount at risk (and its increasing costs of insurance over time) - any outstanding loans (and loan interest)

To put this in another way:

If you have a $1,000,000 death benefit, it may one day have $750,000 of cash values (and whatever it earns) + $250,000 of net amount at risk (and its costs) - any outstanding loans and its interest costs.

EDIT: This was such an in-depth topic, that it was far easier to do a podcast episode on it. Above is our first episode of the Financial Advocacy Podcast and we did a "Consumer Advisory Bulletin" on IUL. It's rather extensive, but it's thorough.


Recent Posts

See All


bottom of page