Helping high-income families grow and protect their wealth — without falling for financial fads. 

You’ve probably seen or heard the: 

“Tax-free retirement income!” 

 “Be your own bank!” 

 “Never lose money in the market again!” 

It sounds incredible. But behind the glossy brochures and persuasive webinars, Indexed Universal Life insurance (IUL) is often misunderstood and misused — especially when it’s marketed as a primary retirement plan. 

In this post, we’re breaking down: 

• What an IUL really is (in plain English) 

• Why it’s being sold so aggressively right now 

• Where it might fit in a smart financial plan 

• And where it doesn’t 

What Is an Indexed Universal Life (IUL) Policy? 

An IUL is a type of permanent life insurance that: 

• Has a death benefit, just like any life insurance policy 

• Builds cash value based on the performance of a stock market index (like the S&P 500) 

• Offers downside protection with a guaranteed minimum interest (usually 0%) 

• Caps your upside — often around 8–10% depending on the product 

Policyholders can take tax-free loans from the cash value in retirement — which is why IULs are being sold as “tax-free retirement income.” 

Why Are IULs Being Marketed as Retirement Plans? 

Two big reasons: 

1. They’re not subject to contribution limits like IRAs or 401(k)s 

2. They grow tax-deferred and can be accessed tax-free (if structured correctly) 

For high-income earners who: 

• Are phased out of Roth IRAs 

• Have maxed out their workplace retirement plans 

• And are looking for tax diversification 

...an IUL can sound like a magic bullet. But Here’s the Thing 

Most people aren’t getting the full picture. 

IULs are often sold by insurance agents — not fiduciary financial advisors — and the incentives are big. These policies are complex, expensive, and long-term in nature. 

Common issues we see: 

• Overpromised returns without disclosing caps, fees, or policy mechanics 

• Underfunded policies that lapse in later years 

• No discussion of alternatives (like Roth conversions or tax-efficient brokerage strategies) 

• No analysis of whether the client actually needs permanent life insurance 

When an IUL Might Make Sense 

We’re not anti-IUL — we’re anti-misuse. 

Here’s where an IUL can potentially fit: 

• You’re a high-income earner who’s already maxing out other retirement vehicles 

• You have excess cash flow and want tax-advantaged diversification 

• You need or want permanent life insurance (estate planning, business succession, etc.) 

• You understand that this is a long-term, slow-burn strategy, not a quick win 

• You’re working with an advisor who runs real, conservative illustrations, not best-case sales material 

When an IUL Is a Poor Fit 

• You haven’t maxed your 401(k), IRA, or HSA 

• You can’t comfortably commit to long-term, high funding levels 

• You’re being sold on hype without full transparency 

• You don’t need permanent life insurance 

The Bottom Line: IULs Are Tools — Not Silver Bullets 

Indexed Universal Life Insurance is not a retirement plan — it’s an insurance product that can complement a strong financial foundation if used strategically. 

Before you commit: 

• Ask if it aligns with your long-term goals 

• Stress-test the policy with conservative assumptions 

• Explore all your alternatives first 

• Work with a fiduciary who’s not paid to sell it 

Thinking About an IUL? Let’s Talk Before You Sign Anything. 

At Fit Wealth Advisors, we help high-income families cut through the noise and build a plan that fits your life — not someone else’s sales quota. 

Book a call to review your current options, or send us your IUL proposal for a second opinion. We’ll tell you — honestly — whether it fits your strategy or not. 

👉 Book a Clarity Call 

 👉 Or DM “POLICY” on Instagram @thefitfinancial_ 

The Fit Wealth Show is brought to you by Plan Group Financial, Inc. (PGF) d/b/a Fit Wealth Advisors. PGF d/b/a Fit Wealth Advisors is an investment adviser registered under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training. This presentation has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Past performance is not indicative of future results.