White Coat Investor DEBUNKED (Don't Buy Indexed Universal Life Insurance)

The White Coat Investor recently wrote an article in which he listed 5 reasons not to buy indexed universal life insurance. Let's debunk those reasons one by one. We've been sparring over the years and it started when he claimed that tax rates would not be going up in the future due to unfunded obligations of the federal government. I stated that you could never print enough money to cover the costs because that leads to inflation, which increases the costs. He didn't get it. So what's he saying now about IUL?

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[seestuff]

When people that have never worked with real clients helping make financial decisions, make recommendations I want to pull my hair out. I have argued endlessly with these guys and bogleheads. They refuse to consider sequence of returns risk, market risk or human behavior into their little spreadsheets.

[darrishawks]

I am skeptical of the benefits of an IUL from a capital accumulation standpoint because I think you could design a portfolio using asset allocation that mimics the floor and cap without having to deal with some of the caveats of an IUL.

[dailstancill]

Best IUL content on yt! Between you, DA and MD, three of yall are nicely defending the IUL case, unlike CK, who is not.

[kf]

Is there anyway to structure an IUL so that the average fees are at 1% in 5 years? I don't expect to live 25 so wondering what I should do for my bond portfolio.

[Youknowwhoin]

Don't need to know how it works or how much commission is made from the sale...

[JoeC]

Good info.. thanks

So majority of the population doesnt need IUL then....!!

[PureMagma]

If anyone is described or describes themselves as "a guru" that's a warning sign. "Guru" easily translates to "self-serving individuals" pretty consistently. 🎯

[HectorLopez-wcfx]

Poor alternative to bonds because portfolios become bond heavy as someone nears retirement. Not efficient to attempt to begin to amass a large death benefit with an IUL at that late stage. I am a physical therapist, and many of my patients receive long-term care--I am intimately familiar with that need and cost. Makes more sense to amass a sizeable nest egg and pay for that care out of pocket. I'm 48 and 3 years away from having $1, 000, 000 invested. No comparison between an IUL's 5% return to S&P500 10% return over decades. IUL's have been weighed and have been found lacking.

[bridge]

Great video David. Can you please elaborate on the comment about an IUL having "higher returns, lower risk and lower standard deviation than a bond portfolio". I want to understand more about the "bond alternative". A video might be a great idea! I have not found one.

[JeremiahS]

Great video, quick and to the point. Have you considered the challenge that Chris put out there to debate him about the IUL? This would be a great way for the community to hear all the strengths and weakness of this product and to really give them all the info to make an informed decision and weigh in what is important for them between WL and UL or IUL.

[seanservo]

You got a like for the block. It takes guts to preach truth.

[vangustia]

White coat doesn't understand estate planning. Lol.

[TheOpinionSports]

Well for those who have a policy that has a guaranteed multiplier then that is about equivalent to a dividend so there is that.

[robertiola]

I hope he's a better doctor than financial advisor, but given his willingness to provide prescription without diagnosis as the latter (malpractice), I would doubt that. The sad part about people like him is that, unlike those of us who have licenses and actually do this for a living, he has no accountability. When people follow his "advice" and it fails, their lives are ruined and he moves on to the next fashionable subject.