This post will be short because what Doug Andrew talks about really isn’t that complicated if you understand the KEYWORDS he uses. When it comes to universal Life Insurance, the key thing to understand is MAXIMUM FUNDING.
Both Dividend whole life insurance and Indexed Universal Life insurance(IULs) revolve around MAXIMUM funding the policies to get optimal returns. If you’re not willing to do this, you’re NOT going to get the results he is referring to.
The words I hear coming out of Doug Andrew’s mouth tend to imply that he’s trying to attract a high-net-worth clientele. The reality, however, is that most people who purchase IULs do not max fund their policies, and not doing this can lead to complications later on because Universal Life Insurance contracts are basically Permanent TERM insurance contracts.
Now, personally, I don’t purchase universal life insurance for the reasons Doug Andrews recommends because PAYING for an advisor is something you have to factor in if you’re going to employ his strategy, and I personally purchase PERMANENT life insurance for the CERTAINTIES, not for the risks.
Life insurance is not a complicated thing as a CONSUMER; you’re buying for the death benefit, and the more you put into the policy, the more wiggle room you have. Now, the actual reason why most of us prefer dividend-paying whole life insurance instead of Universal Life Insurance is because of GOVERNMENT regulations.
You have to remember that the GOVERNMENT is the main reason why permanent insurance is so expensive; insurance companies do pay taxes; you’re not getting tax-free money; you’re getting tax DEFERRED money, and the government makes sure it puts CAPS in place to make retiring more DIFFICULT.
Most of us don’t want the added complications of following hardline formulas to achieve results in ONE investment vehicle. I prefer Dividend Paying Whole Life Insurance because I have more ACCESS to Capital to invest. Universal Life Insurance can tie your money up for five years, which could deny you opportunities that inevitably come your way when you have capital in your possession.
Doug Andrew – 3 Dimensional Wealth is good, but I’d argue it’s geared more towards the affluent. To get any real benefits from IULs, they have to be MAX FUNDED. Universal Life Insurance is a good option for people with a lot of capital who are late to the party of life insurance, so personally, I love universal Life insurance. However, all life insurance products should be viewed as LIFE INSURANCE products and not investments.