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Hi intrcst,

If an investor captured all those fees and charges for their own account by eliminating the insurance company, and let it compound for a lifetime, there'd be enough to fund the retirement for a whole other person.
Not in a taxable spend-down environment they couldn't, but if they could structure the same FRI strategy in a Roth, and get sufficiently better hedge yields than the major institutions to beat the loan arbitrage, then they may be able to outperform the pros... sure.

The major advantage the insurance companies offer is new money can earn the old portfolio yields in their general account for the hedge safe leg. New money on a DIY basis gets 1/5 or less of that (1% versus 5-6%.)

You can stuff your dodged fees in a buy & hold strategy forever though, and come nowhere near the hedged FRI strategy.

Dave Donhoff
Leverage Planner
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