Why is 100% safety of one's principal getting such short shrift in this discussion?Why is no one mentioning the huge tax-free payoff--much more than I put in--to heirs when (not if) I die?I would much rather have my $100,000 (upfront policy premium) guaranteed against market risk with a 17% cap and a $400,000 tax free payoff to my heirs than collecting dividends that may or may not cause that taxable strategy to be better than the IUL.But that's just me. I'm a security addict. You got some good replies -- all correct and all pointing out important factors that you are either overlooking or giving short shrift to.The problem with over-emphasizing "safety" is that you can fall for an illusion. The fact of inflation means that getting 100% of your money back in 20-30 years is a large loss in purchasing power.The exclusion of dividends is also a large cost. Over the last 25 years, that cut the total return of the S&P by more than half. Your final account value would have been only 4 times the initial value instead of 8 times. That's a *very* expensive price to pay for the guarantee.Not sure how accurate that "17% cap" is, either. From what I read, many policies allow the ins co to unilaterally reduce the cap.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra