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Personal Investments • IUL Policy Investment guidance

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As the subject says, I need help and guidance on the IUL policy investment decision. I (US) max out on 401K, backdoor Roth, and HSA investments. After making these investments, we still have surplus cash. While researching, I came across IUL policies that caught my eye. I was amazed by the idea of tax-free income, additional death benefits for my child, and tax-free growth.
Although we have term insurance that provides sufficient coverage, the IUL policy offers the option of creating tax-free inheritance money in the future, as well as the possibility of cash withdrawals and loans (though they have interest). This could be useful in situations like emergencies and long layoffs from jobs. That said, we have an emergency fund that would cover us for 4-6 months.
I understand there is a lot of complexity with life insurance not designed properly and a general thought of keeping investments and insurance separate. What I am looking for is an opinion and clarity on why financially savvy and educated groups are still against IUL policies. What am I missing?
The caps and participation rates ensure that at best you are getting bond-like returns and then paying hefty administration and insurance fees that will erode nearly any gains. Expect annual returns of around 2% without any riders. And no dividends.

Statistics: Posted by Harmanic — Sat Sep 07, 2024 9:27 pm — Replies 3 — Views 190



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