Which is a Better Option? Buy IUL or Buy Term+annuity?

[pfg1]

But the big thing about NA is that they have a secondary feature called the "Protected Death Benefit". This is an option that guarantees the DB will never be less than $25k.
It has the same age 65 / 15 years requirement. But it does not have any of the other requirements. The only catch is that you must elect for this to kick in, it is not automatic. But when the policy gets into trouble territory they automatically send you a letter suggesting to do it.

I agree SC, that is a nice feature they offer for sure.

Personally, I'll take a max funded PLI policy over a ROTH any day.

 

[Golfnut2112]

I agree SC, that is a nice feature they offer for sure.

Personally, I'll take a max funded PLI policy over a ROTH any day.

May I ask why?? A roth has the same tax free income without all the cost associated with them. Insurance companies have been promoting using life insurance policies to supplement your retirement income for years and I have yet to see one that worked even remotely as planned. It started with the UL's then the VUL's now it seems IUL's are the new product of choice.
Do you understand what a Roth IRA is and how it works?

 

[cowgoesMoO]

May I ask why?? A roth has the same tax free income without all the cost associated with them. Insurance companies have been promoting using life insurance policies to supplement your retirement income for years and I have yet to see one that worked even remotely as planned. It started with the UL's then the VUL's now it seems IUL's are the new product of choice.
Do you understand what a Roth IRA is and how it works?

I would hope that the advisors in this section especially know how a roth works.

But one thing to keep in mind, it is simply a vessel. While roths should be the first thing looked at when considering retirement planning, the life insurance is comparable in fees over the long run, in fact depending on how much money one puts into a roth, one might pay more over time for the roth than the life insurance.

Then you factor in the fact that the life insurance will provide protection for the family in the case of an untimely death. If I had to choose one or the other for myself, I'm going with the IUL because I have a 7 year old son who depends on me. When I'm more established, and making more money I'll start up a roth. Another perfect example of how every situation is different and there is no right answer here......

I met with a prospect who was the same age as I (26) and he had no family, no real debt, making 50k/yr. Advised him to start a roth, and a term that he could convert to UL down the road when he gets a family and white picket fence and all that. He ended up just doing the roth. every situation is different is the real point cowboy.

not everybody should have a roth and not everybody should have an IUL and not everybody should wear black leather pants....

 

[DHK]

It's a question of priorities.

If you have a need for life insurance AND you don't have enough (and who can't use more insurance?), then it's simply a question of which type of insurance is the most attractive for other additional goals.

But as Golfnut2112 said, there are costs associated.

For example, if you have $10,000 in a 401(k), at 2% costs, you're looking at only $200/year.

If you have a $10,000/year premium for a $500k policy, then your costs are based on the death benefit - and that'll be much higher than $200/year.

If you don't want/need life insurance, then life insurance with its costs isn't as good as a Roth IRA.

If you want/need life insurance, then choosing from the various forms of insurance becomes a question of preference and additional strategies.

 

[pfg1]

May I ask why?? A roth has the same tax free income without all the cost associated with them. Insurance companies have been promoting using life insurance policies to supplement your retirement income for years and I have yet to see one that worked even remotely as planned. It started with the UL's then the VUL's now it seems IUL's are the new product of choice.
Do you understand what a Roth IRA is and how it works?

Yep, I know exactly how they work.

If I had to pick, I'll take a max funded permanent life insurance product every day over a Roth. In particular, a max funded WL.

Doesn't mean Roth's are bad, quite the opposite. Certainly much better than a Trad IRA. They both have their place, but Roth has some limitations that PLI doesn't, along with risk - which varies depending on how its invested. And yes, I have a Roth as well as PLI....so do many of my clients. Its not an either or deal. I think both are good, and one is better.