Are there really 10 reasons why IUL is a bad investment?

[Winter]

I’ve come across articles listing 10 reasons why IUL is a bad investment.
Are these claims accurate, or does it depend on financial goals?
Would love insights from anyone who has researched IUL policies.

 

[Adam]

Yes. mainly because the fees are very high and the upside is limited. After taking into account the caps on returns, no dividends, and your insurance getting more expensive as you get older, the math very rarely works out better than a simple index fund. It is almost always more advantageous to purchase term insurance and use the money saved for investing yourself.

 

[Blaise]

Yes, some critics list “10 reasons” IUL can be a bad investment, citing high fees, caps, complexity, and long surrender periods. However, IUL isn’t inherently bad—it can suit certain long-term, insurance-focused goals when properly structured.

 

[MitchelThe]

Most of those lists aren’t flat-out lies, but they’re often one-sided. Yes, IUL fees and caps can erode growth, and illustrations assume best-case crediting. But calling it universally “bad” misses that some use it for tax-advantaged legacy planning or downside buffering. It depends on your situation and goals.

 

[deepak]

There is no official or general list of 10 reasons explaining why IUL (Indexed Universal Life) insurance is bad, but critics frequently mention the following negative features of this insurance policy: high charges, confusing regulations, limited returns, withdrawal fees, reduced level of transparency, and preferable options to pure investment. It is either bad or not, based on the goals and situations.