UnThreaded | Threaded | Whole Thread (15) | Ignore Thread Prev | Next
Author: Dwdonhoff Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81365  
Subject: Re: IUL vs. S&P500 spreadsheet Date: 5/29/2013 1:44 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0

If you started with $100,000, and the market drops it to $50,000... the homerun opportunities are available at *THIS* point in time... but your ammunition is gone.
Unless your ammunition in your IUL is gone because you've taken loans for Jr. in college and a $30K car.

Sure, but now you're talking about spend-downs, not market risks. There is no way to insure against your own consumption.

Those items seem to be big selling points when I see discussions about the benefits of IUL - paying yourself interest instead of a bank.
Interesting... I haven't observed this to be the case. The old "pay yourself the interest instead of the bank" has always been (in my observation) the circular logic argument of whole life pitchers. Every time I run into these folks I chop it right at the knees... (I'm not popular with the WL'ers...)

BTW, what does the insurance pay interest on when you take a loan - the original balance or the lower one to account for the loan? For example, if you have $100K available in your IUL and you take a policy loan for $30K for a car, are you earning interest on $100K or $70K?
You're not borrowing *out* your own money, you're borrowing against your principal which serves as the collateral. So, if you have $100,000 principal, and you borrow $30,000, you gain market growth calculated on the $100,00 principal, and accrue your interest costs on the $30,000 loan.

Dave Donhoff
Leverage Planner
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (15) | Ignore Thread Prev | Next


The Retire Early Home Page
Discussion on accelerating retirement day.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.