The Problems with Index Universal Life Insurance

Index universal life insurance (IUL) is a traditional universal life product with an options strategy attached to it. By crediting the fixed amount to buy call options on the S&P 500, IUL introduces more risks and variables into an asset that should be stable and predictable. Furthermore, IUL puts the risk on the insured rather than the insurance company, which goes against why most people invest in life insurance. Additionally, IUL has historically performed worse over time, and the strategy of using it for retirement income has not been proven effective. The lack of understanding and education around IUL leads to confusion and negative consequences for many people.