No. of Recommendations: 1
~ Protects your principal from ALL market declines. (Zero is your hero.)

For some of us, this is not necessarily a feature. I understand that I can get greater reward if I choose to take greater risk, and so limiting the risk would limit my reward, and that doesn't fit with my risk profile or my financial goals.

~ Pays a death benefit, in the event of your demise, to heirs in many multiples of your total contribution.

This is not a feature I would want and certainly not one I would be willing to pay for. I do realize that quite a number of people want to leave their heirs with a big inheritance, and so for them, insurance makes sense. But there is another population in which I fit that has no such intentions. My kids already know they should not expect to receive one penny from us when we die because we intend to spend it all, and they may or may not receive what is left. Instead, we already gave them their 'inheritance' in the form of fully paid college tuition, so this feature of the IUL is meaningless to me.

~ Ensures that ALL gains are protected.

Actually, it only ensures that the gains below the cap are protected. It still gives the insurance company everything above that cap, and the data seems to show that that can be significant.

That said, I do realize that the insurance company is in business to make a profit, and so their money has to come from somewhere. In this case, it comes from the dividends and growth above that cap.

Compare the above against trading naked in the S&P500.

There we go with those loaded terms again. I actually expect investing to be a bit of an up and down ride, and I am perfectly fine with that because the risk I am willing to take also means there is possibility of greater reward.
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