What are your opinions on Indexed Universal Life insurance?

Ryhaleis's picture
Rank: Chimp | 7

I am 27, single, around $100,000/yr income, mostly from ownership in real estate, expecting income to increase by $20,000-$50,000 every 2-3 years as my career continues to pick up momentum and I get into more projects.

An insurance agent approached me last week telling me about Indexed Universal Life. He briefly talked about the different types of life insurance and then why IUL is the "best" and least costly to own in terms of monthly contribution at my age. I am hesitant about committing to such a long term policy because of it being tied up with the markets. To me I see that as a big no-no, mixing retirement and investment, especially when it comes to retirement funds. What he told me sound like too good to be true, so I want to dig for the loopholes. I am always wary of trusting people who live off commissions.

The other gray area is the cash value. I have doubts that the charts he showed me are that rosy. I am also unclear about Cost of Insurance. Basically there are a lot of unknowns for such a long term commitment. Since I'm single and focusing more on building net worth first instead of retirement savings, I am leaning towards not owning an IUL.

Anyone here have IUL or have thought about owning them? What are your thoughts for or against them?