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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76421  
Subject: Re: 7702 Private Plans (indexed universal life) Date: 3/27/2013 5:06 PM
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Dave's analysis is far more indepth than anyone else's on this thread.

Um, that wasn't an analysis, that was a list of pros & cons (as Dave sees them).
It's rather telling that you think it was either an analysis or in-depth.

I may be able to find a 10-bagger on my own somewhere among the ruins, but the last thing I want to do is watch the stock market.
And the grapes are probably sour anyway.

And the gains are tax free!
There is no gain anywhere that is "tax-free". Not if you are a US citizen. The IRS isn't in the business of letting people make money without taking a cut of it. Don't confuse "tax free" with "tax deferred".
That's like the gullible people who fall for the bit about dividends from a whole-life policy being tax free. What they actually are is not dividends but return of excess overpayment -- so says the IRS, which is why they don't get taxed.

IUL's are indexed to the raw value of the index, EXCLUDING dividends. People kinda think, "No big deal, the dividends are pretty small, so I'm not missing out on much." Wrong. If you started out with $10,000 in the S&P in 1993, using the price-only index it would be worth $34,000 today. But including dividends it would be worth $50,000. That's 45% more.

And you are assuming that the index cap is fixed and won't ever be lowered. Most of the IUL contracts I've seen say that the company can unilaterally reduce the cap.

I just bought an IUL myself. I like the idea that I participate in market gains while taking no market losses--ever.
So you fell for the illusion.

More numbers and actual, y'know, math analysis coming up.
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