No. of Recommendations: 0

100BP after 30 years? What is the expense ratio in the first 5 and 10 years?

Looking at a specific case in hand;
5th year annual average internal cost; about 7.5%
10th year annual average internal cost; about 3.2%
15th year annual average internal cost; about 1.9%
20th year annual average internal cost; about 1.3%
25th year annual average internal cost; about 0.95%
30th year annual average internal cost; about 0.68%
35th year annual average internal cost; about 0.50%
40th year annual average internal cost; about 0.35%

Can you point to anything comparable in performance that does better on a cost basis?

Insurers by and large have to manufacture products like these out of the same instruments available to pretty much everyone.

We covered that long earlier in this thread... everything the insurers do, you *COULD* try to DIY... except for the tax shelter features on accumulated money beyond qualified contribution limits, and zero to positive credit access to liquidity.

They don't have a magic, giant source of yield to play with. Stop with the outsized sizzle hawking the miniscule steak (or hot dog in some cases).

Zero "sizzle" in my posts here... strictly meat. Maybe you're unable to get these returns but the IUL carriers do.

RayVT brings a prescient quote that applies, I think;
"It is difficult to get a man to understand something when his income depends on his not understanding it." - Upton Sinclair


Things happen. You lose your job and can't pay the premiums. You become disabled. You develop a condition like Alzheimer's and family lets it lapse.

If *any* of those events cause a lapse in your IUL contract, it was improperly designed for financial performance in the first place. When designed for financial performance, the costs of maintaining in-force status are stripped to the minimum, and designed to decline as the cash value compounds. An optimum design has no more death benefit than the minimum guaranteed annual credits would cover, making it self-floating from day 1.

OTOH, if you're buying insurance for *any* portion of reasons of the death benefits itself, *THEN* you have maintenance issues to be concerned with.


I don't like a lot of these types of products in part because of the lack of flexibility

I don't think you understand what you are referencing. If IULs "lack flexibility" in your perspective, please bring *anything* forward that provides equivalent results with greater flexibility (let alone lower costs.)

Everyone here seems to be against it... yet nobody can provide a comparable alternative...

Why is that, I wonder?

Dave Donhoff
Leverage Planner
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