Chances are you’ve heard about the statement ‘IUL is based on Wall Street performances and is not beyond Wall Street.’ If not, this statement simply implies that you have to rely on Wall Street performances when using indexed universal life or IUL to accumulate wealth. Well, this wealth accumulation theory still relies on Wall Street despite what the name might suggest.

But should you really use IUL for your future needs? If you cannot answer this question hassle-free, then you have definitely come to the right place. Keep on reading to find out more.

Money Loss

You might not know this, but the owner of the policy is at a higher risk of losing money in years when the index mirrored in the policy’s non-guaranteed return goes down. Things are not any different when it trades laterally or when it goes up marginally. That’s why using IUL for your future needs might make it hard for you to reach your future financial goals.

Capped Earnings

Insurance companies have control of how much gain of the index mirrored is shared with the policy owner. In short, the insurance company caps your earnings and relies on the large profits to pay their shareholders. That’s mostly the case when the shareholders are a stock held company. If this is not enough, they share with the participating whole life insurance policy owners in case they do not have shareholders and are mutual company.

For this reason, using universal life or IUL to accumulate wealth beyond Wall Street may make it hard for you to attain your full potential. Furthermore, you will have to rely on Wall Street performances for things to turn out the way you expect.

The Bottom Line

These are just but some of the reasons why you should not use IUL for your future needs. Be sure to do your homework and understand what it is all about. That way, it will only be a matter of time before you finally attain your future financial goals without going through a lot.