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IUL Help - Indexed Universal Life - Surrender?

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  • IUL Help - Indexed Universal Life - Surrender?

    I am a new member here and wish I had found this site about 5 years ago.

    A couple of years ago I was convinced to purchase IUL policies for my wife and I. The benefits we were sold on were the typical guaranteed
    returns in a down market, asset protection being physicians, and use of the policies to build cash value to take it as income in retirement.

    I have read quite a bit lately about the reasons not to buy these policies including this article

    Now, I am trying to figure out what is the right thing to do at this point.

    My wife and I are in our 30s, both physicians, have about 500K in retirement accts and 1,500K in brokerage accounts.
    Only debt is mortgage of about 500K at 3%. 5 kids with 529s.
    Expected annual income is about 850K per year combined.
    We will have a 50k per year government pension starting at age 60.

    The policy we both have is Penn Mutual Accumulation Builder II IUL

    We have cash value in each of our IULs of about 70K and a listed cost basis of 71K.
    Looking at the yearly statement for one of the accounts it shows - 11K in premiums paid, 6K in interest credited, and 2K in charges.

    So my question to the insurance experts, is what to do now? Or at least what variables should I be looking at to make that decision.
    I understand a cheap term policy is typically the right answer but now that I have so much in this policy - should I continue?

    Appreciate your advice and time.


  • #2
    Breaking even in two years is pretty good for these things. Whether that means you should keep it or just take advantage of now being able to bail having only lost the opportunity cost of buying real investments is up to you.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011


    • #3
      good news is you can go whichever way you want and be fine.  I think you guys might be one of the few families that UL makes sense for however.

      is asset protection a concern in your lives?




      • #4
        You will need to order an in force illustration (or possibly look at the current Annual Statement) and reference it with the original illustration which should be included with the original physical policy, in order to see how the policy is currently performing, and how it was initially illustrated. This policy appears to have a minimum 20yr NLG (No Lapse Guarantee), but it really depends on your objective and whether you want to stay the course.

        With that being said, if the goal is just to cover the pure cost of insurance, then Term would be the way to go, as with Term, you're just paying for pure insurance - No bells and whistles. As you probably already know, IULs are oftentimes oversold and usually have high internal costs, which means that a larger portion of your premium dollars are going to expense charges and an increasing cost of insurance.

        Based on your young age and high combined income, it sounds like you will be FI rather quickly, but there are a lot of other details to consider, based on your specific situation.

        Hope this helps!

        Jason P. Veirs - Life and Disability Insurance Broker located in San Diego, CA - Owner of
        Office Direct: (619) 334-2400 | Email: [email protected]


        • #5
          Thanks for the responses.

          I wouldn't say asset protection is more of a concern than any other physician - but there happens to be two of us that are practicing medicine . . .so it is something that we think about.

          I got an in force illustration of the policy which was shown with a hypothetical gross rate of return of 7.2%.

          It shows a dividend rate of return of 2%, capital growth rate of 5.2% (hypothetical gross rate of return 7.2%) and investment expenses of 1%.
          It says all expenses are included in the projection.

          It shows with current 14k annual policy premiums will have 1.28M cash value at age 64 with a 1.6M death benefit.
          The projection then shows taking out 120K a year until age 95 when there will be a 660K cash value remaining with 770K death benefit.


          I like the asset protection, income in retirement, and death benefit for my kids if something were to happen.

          These policies just seem to have such bad reputations on the forums that I want to make sure I'm not making a mistake keeping it.


          Appreciate your time and information


          • #6
            What's the guaranteed return?  This will be the smaller number, rather than the rosy projected return.


            • #7

              What’s the guaranteed return?  This will be the smaller number, rather than the rosy projected return.
              Click to expand...

              Yeah. I like the word “hypothetical.”


              • #8
                There isn't a guaranteed column on the in force document. I recall at the time of signing up that there was a "guaranteed" minimum growth of 2% and a cap of around 12%.


                • #9
                  Based on this link here -, the current cap for the 1yr S&P point-to-point for this product looks to be at 11.25%.

                  The latest Annual Statement should show the exact cap and guaranteed interest rates, or you should be able to call PennMutual and find all of this information. These IULs have a lot of moving parts and their actual performance is dependent on how the index performs over time.
                  Jason P. Veirs - Life and Disability Insurance Broker located in San Diego, CA - Owner of
                  Office Direct: (619) 334-2400 | Email: [email protected]