What Insurance Agents Don’t Tell You About Indexed Universal Life (IUL)

Brian ManderscheidAdvisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Indexed universal life (IUL) is a popular investment, thanks to aggressive marketing. Before your clients succumb to the high-pressure sales tactics, here’s a cautionary tale based on another lifetime purchase decision – buying an engagement ring.

Before my wife and I got engaged, I was on a mission to find the perfect ring, not only for her, but as a symbol of love to pass on to future generations as part of our family tradition. At the time, I didn’t know where to start, where to go for advice or ultimately who to trust with this extremely important life decision. I started my quest at a fancy big-box jewelry store where I was greeted by well-dressed salespeople who were friendly and very eager to make a sale. They insisted it was wise to overspend, stretch my budget and buy the biggest ring I could possibly afford. Uncomfortable with my initial interaction with the jewelry sales world, I decided to reach out to a trusted family member for advice. From there, I was referred to a jeweler who this person had used and recommended throughout the years. I met with this jeweler, and he gave me a thorough education on diamond quality, discussed what I was comfortable spending and explained how jewelry is typically sold. He explained a concept called buying wholesale versus retail. He said big-box jewelry stores add a significant mark up or margin that is built into the retail price to cover the expenses of the elaborate building, plentiful staff, additional overhead, marketing costs and ultimately profit.

You pay more when buying retail.