re: Indexed Universal Life Insurance

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Not arguing with you either, but if you look at the S&P, the WORST it has performed in a 30 year time period is 8.5% average.

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I understand this, but the S&P is not a person with emotions. Under your assumptions, you would first have to put 100% of your money in the S&P 500 index, which I am not sure any rational investor would do. Then you would have to assume that investor never gets scared and pulls his money out like plenty did in 2008-2009. These are very big assumptions.

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To make it very simple, the S&P 500 returned 7.8%, while the Barclays Capital US Aggregate Bond Index returned 6.5% over the same time period. A 50/50 blend of these two asset classes would have yielded a nominal annualized return of 7.2%. Wait, it gets even worse. After including inflation, the average investor got a negative real return. Inflation (CPI) grew at an annualized rate of 2.5% during the period. So the average investors' net real return was -0.4%. The average investor is not very good at capturing the market return of a simple balanced portfolio, never mind outperforming it.

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I guess my issue was this absolutist and condescending post. Permanent insurance does have certain situations where it makes sense. It just so happens that as an investment it usually doesn't.

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This is the standard response of somebody who either sells Universal/whole life products, or someone who has no idea what they are talking about and wants to sound intelligent. NO it really doesn't depend on him and his situation, no person or situation conforms to a piece of shite product.

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