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Hi Sykesix,

1) A catastrophic life event happens
2) The catastrophic life event (CLE) occurs during a large market drop
3) The CLE is costly enough to wipe out the traditional B&h investor

Not necessarily... the CLE simply has to force enough consumption of underwater principal, and/or future contributions, to erode the return below the safer IUL.

4) BUT not so costly that it wipes out the IUL investor
True, any CLE bad enough to wipe out the IUL owner wipes out everyone.

An IUL is superior to traditional buy and hold when all of those conditions are met.
AND any erosion of returns below the IUL threshold.

The odds of all those things happening are astronomical, and dependent on the size of the CLE.
Not really... it happens *ALL* the time.

More importantly, it doesn't matter... as an individual's financial retirement trajectory is tantamount to owning a single home you live in. You insure for full replacement against fire, even against astronomically low odds, because you can't live in a half-destroyed home.

A half destroyed financial retirement trajectory is the same as 100% destroyed for the vast majority of people.

Dave Donhoff
Leverage Planner
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