Deal Breakers

24 Indexed Life Deal Breakers

January 2018

  Here are 24 Features of Indexed Life policies that if they are missing from an IUL it is an egregious omission and an automatic DEAL BREAKER regardless of how good the rest of the policy may be. If the primary purpose for having an IUL is Retirement Savings and Income the Loan options are the most important after Caps and Expenses. As such, how the money can be taken out of the policy eventually is critical to having it be successful as well as “protecting” the integrity of the policy in a worst case scenario (preventing a Lapse because of loans).  Some are not in and of themselves critical or “bad”, but there may be better IUL’s without the DB so why not go with those instead?!

· Deal Breaker #1: Poor Ratings

· Deal Breaker #2: Low Index Cap

· Deal Breaker #3: Poor Sweep Policy

· Deal Breaker #4: Fixed Rate Bucket Requirement

· Deal Breaker #5: Bucket Periods More 2-5 Years

· Deal Breaker #6: High Cost

. Deal Breaker #7: (High Cost) Asset Fee

· Deal Breaker #8: NO Policy Expense Report

· Deal Breaker #9: Poor Accelerated Death Benefit

· Deal Breaker #10: Chronic Illness Policy Costs Waived

· Deal Breaker #11: No OverLoan Rider

· Deal Breaker #12: Fixed (or Variable) Loan Only

· Deal Breaker #13: Level Death Benefit Only — NO Increasing (Option B)

· Deal Breaker #14: No Fixed Loan Rate “Wash”

· Deal Breaker #15: Cannot Switch Loan Type

· Deal Breaker #16: Must Payoff Loan with Other Monies 1st to Switch Loan Type

· Deal Breaker #17: Limited Loan Switch Allowed

· Deal Breaker #18: If any Loans, ALL NEW Premium must go to Fixed account

. Deal Breaker #19:  NO VR LOAN CAP (or high cap)

. Deal Breaker #20: ALL Premium – less ins. costs – MUST be applied to payoff Fixed Loans

. Deal Breaker #21:  VLR Cap NOT a true cap OR Requires funds be put into other Index account with different cap potential

. Deal Breaker #22:  Bonus NOT Guaranteed and/or NOT paid against loans.

· Deal Breaker #23: If Co. has EVER increased costs on issued policy

. Deal Breaker #24: Not a participant in the Life Settlement act – Do NOT proactively notify known beneficiaries with the intent of keeping proceeds for the co.

For more details about and the list of companies for each see the:



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