Dave Ramsey Thinks IUL is CRAP (My Response!)

In Dave Ramsey's most recent video on Indexed Universal Life Insurance, he calls it a big pile of...In this video, I'm going to respond to each of his criticisms. Dave Ramsey gives a lot of good advice about staying out of debt and managing your finances. But that doesn't mean that everything he says is beyond reproach. He's not lying but he doesn't fully understand the nuances. He often conflates whole life with indexed universal life. Let me know what you think in the comments below.

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[victoriajugueta]

The cost of insurance and charges is shown in the illustration.Yes, the cost of insurance increase but cash value also increase based on interest rate.Beside, nobody knows when are we going to die.Most people die at the later age.If you put the IUL in option B, the beneficiary will get the cash value plus death benefit.

[benjamingaines]

Great stuff you mentioned. As an advisor I’m always learning. Why do you feel an IUL pairs with IRA well? Would you say it depends on the client and them not maxing out an IRA ? Would other tools do you add as part of a complete comprehensive plan?

[chuckthebuilder]

option b is increasing or level? do you reccomend starting the policy at increasing and change to level at a certain age or how do you suggest agents structure them?

[darongarcia]

What’s the max someone can put in there IUL at once and is it considered a high yield savings account?? like if it’s a 500k policy and I max it out in a year will it still compound or just stop ??

[brandonbrown]

I sell IUL as an asset protection account.

10 to 15 years front loaded, with more cash accumulation towards to later years.

I will also select "less death benefit, more cash accumulation option " should a client want.

You just have to be upfront with these things.

[kelicajohnston]

The key term is if it's set up properly. The average person won't know if it's set up properly. The sales person will set up the policy purposefully as to get most of the money you pay out. They sale the IULs focusing on the potential of the upside of the policy, but never dicuss the risks- you're set up for the kill.

[leilahernandez]

Dave what is the max age where this IUL would make no sense? What is the minimum period you must hold it to grow your cash to a point where you can borrow $60, 000 w/o compromising the contract. Thanks.

[HolisticlyMiraB]

Some great reads, Nelson Nash's "Be Your Own Banker", "Money Wealth and Life Insurance" and "The 770 Account".

[Optimalcoverage]

Do you show agents how to structure these and your favorite companies to use?

[DesertDann]

What happens when the iul is upside down ? How do we benefit if no one pulled cash value ?

[jmbd]

How does the average person know if an insurance plan is structured properly? I'm going to research this next because I'm interested in MPI RELOC.

[xfvyotr]

I follow Dave's videos, and I like the Baby Steps/ BUT you are right here in your video. I just have one question. What happens to my cost of insurance if at age 60yo I will withdraw 90% og my Cash Value? Since the Cash value went down to only 10%, so the net amount at risk of the Insurance company increases, WILL my cost of insurance Soar high too?

[renudevi]

So I don’t have a 401k currently. I travel for work and I just got into an IUl putting money away for my retirement. My travel work pays well but I don’t get 401k. Have over 100k in savings and I put a chunk of it in my IuL every month. Is that a good thing you think? I eventually will get a full time job that I can contribute to a 401k also. I’m 36 years old and and I’m just a little nervous and I want to be smart o about my retirement ! Please let me know

[KatsDad]

I had a convertible term policy for 500k. I had a salesman talk me into converting into a 100k IUL policy. I thought it was a whole life policy. The salesman was concerned about his commission only. Every year I would call him. He explained nothing. He died along with my first insurance salesman.

[QuaverSager]

Question, If I'm understanding this correctly, in the Index Life Insurance, you start with a high premium for more life insurance, then overtime when you have a higher cash value you pay less in premiums. Is that correct?

[wysbbsc]

I hate when they say permanent life insuramce makes more commission. If you use excess premium or PUA it pays way leas commission then a higher term. I just wrote my own iul at $200 a month, and planning to up it in the near future, and i took like $200 in commission. That is way low. My agency sold a term revently that 6x that in commission.

[HistoriaViva]

an IUL is just a Life Insurance Policy. After exhausting all investment instruments available, maybe, some qualified people would put some money aside to an Index Universal Life Insurance policy as it is, just a life insurance policy.

[kevinsr.]

Question 1. I have 250, 000 CV and 250, 000 FV witch equals 500, 000 death benefit year 5 and on year 6 I borrow 100, 000 how much death benefit do I have?

Question 2. Can my CV grow higher then my death benefit? If so explain what happens to the premiums.

[TheOpinionSports]

If your IUL is set at increasing DB option 2, does your cost of insurance still go down the higher the cash value gets?

[cbacon]

Friends get multiple certificates from the credit union when they have large amounts saved to get a guaranteed 5% interest to save for their kids. Would an IUL be a better investment? They wouldn't have dedicated amounts to put towards a policy every month, just sporadic one-time amounts. Should they pay off credit card and other debts like Dave Ramsey suggests before contributing to a retirement account?