No. of Recommendations: 7
If all you're going to do is stick the money in an IUL or stick the money in an S&P500 fund and don't disturb it for 30-35 years, then, yes, the naked S&P500 will do better; that is, it will accumulate more money--but not much more money--in a narrow way. But you'd better not have a need for cash, in all that time, for either catastrophic life events or just opportunities that only cash can fulfill.

That's clearly not true. A simple buy and hold not only accumulates more money than the IUL, it accumulates vastly more money. Let's go back to the original example of $10,000 initial + $100/month starting in 1975.

Now, let's say you have a catastrophic life event in 2002, right at the worst possible time for buy and hold, and at the time when the IUL provides maximum protection.

If you went the IUL route, you have $200,000 you can borrow against.

If you went simple B&H you have $500,000 that you can do whatever you want with.

Same thing with the 87 crash. B&H still beat the IUL. There actually are some periods when the IUL outperforms, but they are short and simply get lost after any reasonable period of time.
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