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Mar 28, 2017 by |

Santa Clara Insurance Attorney: Indexed Universal Life Insurance

Are Indexed Universal Life Policies Investments?

Life Insurance and Retirement Savings

Since they were created in the 1980’s, indexed universal life policies (IULs) have been the wunderkind of the life insurance industry. Agents tout them as great investments for the future; detractors see them as pitfalls for the unwary. Late last year, Safe Money Resources published one of the best primers we’ve seen on IULs. If you’re considering a purchase, please read it. It compares these policies to other retirement savings vehicles. If you’ve already purchased a policy, and live here in California, perhaps we can help if you have concerns.

The two biggest concerns with indexed life insurance: escalating fees and delayed results. To compound these problems, experience teaches both come as big surprises to policyholders. First, the fees. Be warned that in Year One almost all of your premium payment will go toward the agent’s commission. Years Two and beyond? Well, the commission goes down only to be replaced by other fees and charges. We have seen indexed universal life policies where as much as 25% of the premium in later years goes to fees!

And the deferred realization of gain -if any- is another huge downside. IULs have long maturities (20-25 years) unsuitable for older policyholders. Indexed universal life policies often come with an option to withdraw cash values earlier. But – and here’s the rub – withdrawals are subject to deferred sales charges and additional fees which your agent may not have fully disclosed. The bottom line here is that indexed universal life policies are very complicated hybrids of life insurance so please seek the advice of an independent advisor before purchase and if you are locked into an unsuitable policy, seek counsel.

Some of the providers of Indexed Life Insurance Policies in California are:

  • Pacific Life
  • Prudential
  • Aviva
  • Athene
  • Accordia
  • Minnesota Life
  • Aegon USA
  • National Life Group
  • Penn Mutual
  • Old Mutual Financial
  • Midland National Life
  • Allstate Life
  • North American NACOLAH Life
  • Transamerica
  • Nationwide
  • Voya

Contact Us

If you have questions about an indexed universal life insurance policy you purchased here in California, contact the Evans Law Firm insurance attorneys at (415) 441-8669, or by email at Our attorneys have experience with complex indexed universal and whole life policies and annuity contracts and cases against large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We handle cases involving physical and financial elder abuse, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

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