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Indexed Universal Life is so misunderstood! Make sure you are working with someone who knows what they are doing.

Fees can absolutely devastate any portfolio! They are especially important to understand when it comes to indexed universal life (IUL) insurance!
IUL Crediting:    • Indexed Universal Life (IUL) Insuranc...  

Complexity of Indexed Universal Life (IUL) Fees: The video delves into the intricate fee structures of IUL policies, highlighting the premium load, cost of insurance (COI), expense charges, per face/unit/thousand charges, and rider charges. It emphasizes that understanding these fees is crucial for avoiding policies that result in higher costs and reduced cash value.

Premium Load: This is a fixed percentage fee based on the premium amount, usually ranging between 48%. It's applied only when a premium is paid, making it a straightforward but significant part of the policy's cost.

Cost of Insurance (COI): COI varies based on age and risk classification, and it's one of the larger fees in an IUL policy. It's calculated on the net amount at risk, which is the death benefit minus the cash value. The video clarifies a common misconception that COI always increases with age, explaining that effective policy design can actually decrease the net amount at risk and potentially lower the COI over time.

Additional Expense Charge: Identified as the largest fee in IUL policies, typically lasting for the first 10 years before significantly decreasing or disappearing. This fee highlights that IUL policies are frontloaded with costs, making them less suitable for shortterm financial goals.

Rider Charges: These apply only if additional options are added to the policy. While they can provide valuable benefits like longterm care coverage, they also add to the overall cost of the policy.

Policy Structuring Impact on Fees: Through sidebyside comparisons, the video demonstrates how the same product and premium can result in vastly different fee amounts and cash values depending on how the policy is structured. It showcases an efficiently structured policy with lower fees and higher cash value versus a poorly structured policy designed to maximize agent commissions at the expense of the policyholder.

Comparison with Managed Investment Fees: The video contrasts the total fees paid in an efficiently structured IUL policy against the fees for managed investments, challenging common perceptions about the costeffectiveness of life insurance as an investment vehicle. It argues that when considered over a long period, an IUL policy may offer comparable or even lower fees than managed funds, with the added benefits of tax advantages, life insurance coverage, and protection from market volatility.

Empowerment through Education: By explaining the nuances of IUL fee structures and debunking myths, the video aims to empower viewers with the knowledge to identify and avoid bad financial advice. It encourages leveraging available resources, like the "Bad Advisor" ebook, to become more informed and make better financial decisions regarding IUL policies.

This summary encapsulates the video's insights into the complex fee structures of IUL policies, underscoring the importance of informed policy design and challenging common narratives about the cost and value of life insurance as part of a financial strategy.
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