max-funded indexed universal life insurance(IUL)

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ddiaz396
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Joined: Tue Sep 29, 2020 3:28 pm

max-funded indexed universal life insurance(IUL)

Post by ddiaz396 »

Doug Andrew - 3 Dimensional Wealth. This man is always on YouTube, talking about a Max-funded indexed universal life insurance contract ... what is the catch? Sounds great ... not having to pay taxes. Too good to be true !! Can someone explain where "the rat comes out"! Thanks :confused
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anon_investor
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Re: max-funded indexed universal life insurance(IUL)

Post by anon_investor »

ddiaz396 wrote: Sat May 15, 2021 2:52 pm Doug Andrew - 3 Dimensional Wealth. This man is always on YouTube, talking about a Max-funded indexed universal life insurance contract ... what is the catch? Sounds great ... not having to pay taxes. Too good to be true !! Can someone explain where "the rat comes out"! Thanks :confused
The high fees and having to pay ordinary income tax if you ever need to cashout your policy...
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Nate79
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Re: max-funded indexed universal life insurance(IUL)

Post by Nate79 »

Search on here and you will find a ton of threads on the topic of these near scam trash products sold to the ignorant.
123
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Re: max-funded indexed universal life insurance(IUL)

Post by 123 »

If you want tax-free gains just "buy-and-hold" anything until you die and it gets a step-up at death. While proceeds of life insurance aren't taxed as income they count as part of the estate for potential estate taxes.
The closest helping hand is at the end of your own arm.
EHEngineer
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Re: max-funded indexed universal life insurance(IUL)

Post by EHEngineer »

The indexed insurance usually does not link to the index 1:1, you only get a fraction of the market return. Usually they keep the dividends and cap the market return. So if the s&p500 goes up 18.4% like it did in 2020, your IUL may only return 6%, or whatever the cap is. If you have a $300,000 IUL you may forgo $30,000 of gains in a single year, or more. That's shockingly expensive.
https://www.wealthmanagement.com/insura ... ages-oh-my

The guy is a good salesman, even does literal hand waving. My 2 cents: buy term and invest the rest.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius
afan
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Re: max-funded indexed universal life insurance(IUL)

Post by afan »

EHEngineer wrote: Sat May 15, 2021 3:24 pm My 2 cents: buy term and invest the rest.
Just don't "invest" the rest in a different cash value life insurance policy.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
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Stinky
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Re: max-funded indexed universal life insurance(IUL)

Post by Stinky »

ddiaz396 wrote: Sat May 15, 2021 2:52 pm Doug Andrew - 3 Dimensional Wealth. This man is always on YouTube, talking about a Max-funded indexed universal life insurance contract ... what is the catch? Sounds great ... not having to pay taxes. Too good to be true !! Can someone explain where "the rat comes out"! Thanks :confused
Two old sayings come to mind:

“If it sounds too good to be true, it is”

“Don’t let the tax tail wag the dog”.

The salesman has every reason to con you into buying this product - he’ll make a huge commission if you sign up. If you do put money into this, you’ll face massive surrender charges for the next decade or more to get at your own money. You won’t make anywhere near “stock market” returns. Your performance will be punished by high fees built into the product every year. And you’ll only accomplish this tax “trick” under a narrow set of circumstances that will take decades to play out.

Don’t even think about buying this.
It's a GREAT day to be alive! - Travis Tritt
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