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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75537  
Subject: Re: Retirement, college, and Obamanomics Date: 1/6/2013 3:11 AM
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Trying to argue in *favor* of a mystical non-strategy supposedly superior to an IUL that nobody has yet brought forth, by randomly choosing any off-the-shelf unstructured IUL is pretty damning in the lack of argument itself.

Flag on the play. You're the one claiming these IULs do all these great things. Fair enough. But since you're keeping the details secret, somebody else has to go looking for the particulars. That being the case, you are in no position to complain if someone actually finds them. If you have a different policy in mind, then the time to fess up was two posts ago.

As I mentioned, the policy I looked was the first one that popped up on Google. I subsequently looked at two more from Nationwide and Avvia, again in the order of search results, and they both had virtually identical terms as Hartford. 12% cap on returns which is variable and based on conditions they don't tell you about. Read 'em and weep:

https://ssc.nwservicecenter.com/media/pdf/FLM-0834AO.pdf

http://uuinc.com/iul_page/Aviva_understanding_iul.pdf

As I mentioned, since the top cap is variable based on unknown factors (but no less than 3%!) we can't make any reasonable estimate about future 30-year returns because we have no idea how they calculate the top cap. My guess it is based on insurance company profits, but who knows? And since these things have only existed for a decade or so, we have scant historical performance information to use as a comparison.

Sometimes things don't make sense at face value, but when you drill down you find out there is a higher level of understanding that pulls everything together. IULs don't make sense at face value, and as you drill down, there are more and more questions, gotchas, and hidden problems you didn't know about before.

As a rule of thumb if you have no idea how the terms of deal are calculated and the other party isn't willing to tell you...probably not a good deal for you.
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