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Too much face amount in my IUL

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  • Too much face amount in my IUL

    Agent sold me an IUL with too much face amount and said if S&P returned 8% like always, this policy will perform well. Now, the insurance company reduced the caps to almost 8%. No way this will perform 8% every year. I have to double my premium to get those kind of returns which is not affordable to me. The other solution is to cut the death benefit in half but I will lose the accumulated cash value in half. Is there a solution to this?

  • #2
    Get rid of the IUL policy and 'invest' the premium you are currently paying into taxable account.  The taxable account assumes you have contributed the maximum towards a tax-deferred account (401k, etc.).  I'll assume this is not a trick question.

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    • #3
      A great example of why IULs are products made to be sold, not bought. I don't suppose the agent is willing to refund you this commission for the inappropriate sale of this product to you unless you threaten to report him or sue him, right?
      Helping those who wear the white coat get a fair shake on Wall Street since 2011

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      • #4
        You mean this situation can be corrected? Just by threatening to sue? Will his commission be equivalent to the amount of surrender charge?

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        • #5
          It is not a small amount that i can simply forget. 92k!
          I have no choice but to throw good money after bad money till i break even.

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          • #6
            Can you help with this? Perhaps you know of an attorney or you know the procedure on how to sue/complain to the department of insurance.

            Insurance is supposed to bring peace of mind. I am losing sleep over this.

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            • #7
              you never provided info on the product so you never got detailed responses.

              however, the first response is likely the answer: cut your losses and get rid of it.

               

              why are you stuck in the world of whole life vs universal life vs variable life vs permanent life etc etc etc

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              • #8




                It is not a small amount that i can simply forget. 92k!
                I have no choice but to throw good money after bad money till i break even.
                Click to expand...


                Sounds like a lost cost fallacy. You need to run the numbers and figure out the cheapest way out. Usually this is taking the loss right away. Threatening legal action may (or may not) get the agent to refund the commission. (If you aren't already angry enough wait until you realize how much they made for selling you that policy.)

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                • #9




                  you never provided info on the product so you never got detailed responses.

                  however, the first response is likely the answer: cut your losses and get rid of it.

                   

                  why are you stuck in the world of whole life vs universal life vs variable life vs permanent life etc etc etc
                  Click to expand...


                  I do need some permanent life insurance. I am clear in my mind about that. It's just a question of right product and right face amount which truly provides that and no cheating to maximize agent commission.

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                  • #10
                    Most do not. I doubt you fall into this category.

                    What specific reason do you think a permanent death benefit is needed in the next 30 years that 5-10MM of term could not cover?

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                    • #11




                      It is not a small amount that i can simply forget. 92k!
                      I have no choice but to throw good money after bad money till i break even.
                      Click to expand...


                      How much do you already have in this product? Would you actually lose $92k or a percentage of that? Do you clearly know the surrender costs? It seems unlikely that continuing to throw money at this will make it better for you financially in the long run.

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                      • #12
                        Does it help if I also chime in and say you should dump the policy and get term life?  Throwing good money after bad is never a good idea in my opinion.

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                        • #13







                          It is not a small amount that i can simply forget. 92k!
                          I have no choice but to throw good money after bad money till i break even.
                          Click to expand…


                          How much do you already have in this product? Would you actually lose $92k or a percentage of that? Do you clearly know the surrender costs? It seems unlikely that continuing to throw money at this will make it better for you financially in the long run.
                          Click to expand...


                          Yes, I will lose half. Since then I learnt a lot about these IULs. They are NOT meant as an insurance policy, they are designed as an investment with as low death benefit as possible. Whether they are good or investing in mutual funds is good is an argument I dont want to get into at his time.  If they are bad with low death benefit, imagine what it's like in my policy where the DB is 5 times more (or premium being funded is 5 times less). It's destined to blow up in the future. I know I have to get out but I am telling you all I also have a very specific need to leave atleast a million behind. [noncontributory comment deleted by moderator]

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                          • #14
                            Perhaps you would get more help by posting on the Bogleheads forum (www.bogleheads.org). It is a much larger and diverse financial forum.

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                            • #15




                              Perhaps you would get more help by posting on the Bogleheads forum (www.bogleheads.org). It is a much larger and diverse financial forum.
                              Click to expand...


                              Thanks, I will try that. Physicians already picking on me here on my language, my punctuation

                              I know, there is no solution other than sue or take a loss.

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