IUL Calculators – Do They Work?

IUL calculator, IUL quoter

While its tempting to try to get a quick answer regarding an IUL (indexed universal life insurance), or other type of insurance using a calculator, it is difficult to get an automatic quote using one.

What is Indexed Universal Life insurance?

Indexed Universal Life Insurance, more commonly known as an IUL, is permanent life insurance that provides a death benefit and a cash value account. When you purchase a policy, your monthly payments, or premiums, are split between the death benefit and the cash value account. The cash value is invested against a stock market index, and the account value grows as the policy matures. Our article What is Indexed Universal LIfe Insurance covers IULs as a whole in greater detail.

How do IUL calculators work?

IUL calculators, or automated quoters, collect metrics about you in an attempt to automatically generate a policy quote. However, there are many qualitative data points that must be collected in generating a quote, making it difficult to get a true picture of the policy cost. You will likely always end up having to speak with an agent to get an accurate quote, and most calculators are simply an attempt to collect personal information to then pass along to someone in the brokerge.

What has to be taken into consideration when building an IUL policy?

To build an accurate picture of your policy and its costs, many unique considerations have to be taken into account. These include but are not limited to:

  • Budgeting and current versus future goals
  • Ability to add to the policy in the future in lump sum contributions
  • How long you plan to pay into the policy and
  • The ultimate goal for the policy (retirement income, opportunity/emergency fund, family protection, business protection)
  • Preferences between a level death benefit or having the option to increase in the future

Additionally, health, lifestyle and history ultimately dictate the risk class for each person. This affects the cost of insurance, and as a result, the performance of a cash growth on a policy, making it impossible to get a clear picture using an IUL calculator.

Your best option in getting a complete picture of what a policy would look like is to talk to a licensed insurance broker like myself. Please call 512-922-1273, or schedule a time to speak.