Should I get indexed universal life insurance (IUL)?

I met with a financial advisor that says he is a fiduciary. He wants me to consider an indexed universal life insurance along with a Roth IRA and contributing to my company's 401(k). I am a 30 year old with $30,000 in fluid assets who is looking to buy a house and get married soon and want to start putting my money to work. Is an IUL a good idea?

401(k), Choosing an Advisor, IRAs, Real Estate, Life Insurance
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April 2018

I am not a fan of insurance products that try to masquerade as investments.  Often, they are better for the sales person selling them to you (because the commissions can be high) than they really are for you.  You will probably get other answers that dispute me, but that's the way things are.

You should only carry enough life insurance to fill the financial hole that your death would make in someone else's life.  Don't buy insurance until you have a spouse and a home.  Then, you should carry enough to allow your spouse to continue to have the same lifestyle that you did as a couple while you were alive.  (If kids come along, just buy more insurance.)  Term life is very cheap at your age.  Get an appropriate policy and you can invest the difference between term premiums and the cost of an "insurance product".  Most likely, you will get better returns because UL fees can be high.

But, that requires discipline.  UL is a form of forced savings and unless you can discipline yourself to "pay yourself" every month by putting a regular amount into your investment account, you may find yourself worse off over the years.  It's a good sign that you have met with an advisor and posted a question on Investopedia, so I have high hopes for you.  Just beware of a slick sales pitch -- and I am guessing you feel the same way, or you would not have asked us.

April 2018
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April 2018