EIUL - Equity Indexed Universal Life Insurance Policy

[M237]

Hello

I wanted to hear everyone's thoughts on EIUL. Should I (a 25 year old) invest in EIUL or should I focus on investing in my 401k?

[chasesfish]

The more words an investment has it in, the faster you should run.

That and whole life are actually good in theory, but I've never seen a policy that makes sense because the fees/embedded insurance is so high.

[Frankies Girl]

Hello

I wanted to hear everyone's thoughts on EIUL. Should I (a 25 year old) invest in EIUL or should I focus on investing in my 401k?

No to universal life insurance, yes to 401k.

If you have a need for life insurance ever - and the only reason to have any is if you have dependents that rely on your income (spouse/children) - then get a term life policy until your investments/net worth is capable of sustaining your family (10-20 year term life policy). Then drop it.

Universal life insurance (and that includes any life insurance policies taken out on children) are almost always (dare I say "universally" ?) a bad decision.

[pbkmaine]

Run from anyone who tries to sell you anything but term life insurance. And only buy term when there is a need for it.

[cincystache]

I vote NO on EIUL or any life insurance until you have children.

If it was a great product, they wouldn't have to pay people to sell it. No one gets rich from life insurance except maybe the agents selling the products. Life insurance is just a tool to replace your income in case you die and people depend on you. Buy term (if/when you have kids) and invest elsewhere.

I remember when I started my first "real job" in 2009 and the life insurance stalkers salesmen would call me  trying to set up face to face meetings to sell me all kinds of products that promised better return with less risk... I'm glad I had enough sense to refuse then and max out my IRAs instead. I encourage you to do the same. Also, they might offer to manage your IRA for you... Just say no, insurance salesman are super annoying, tell them you don't make any money and you don't have any money and that you just lost your job. If they think you are broke they will stop contacting you and bother someone else.

One of the salesmen even said I should consider quitting my job and selling life insurance after I pointed out the product was a bad deal for the investor. What a joke.

No offense to insurance salesmen out there but a few are giving you all a bad reputation.

[M237]

Thanks for the feedback! I read an article in Bigger Pockets and another personal finance blog that was promoting EIUL over 401ks so I wanted to dig deeper.

Also just FYI I asked the nice couple at Go Curry Crackers and they said the same thing. Only the sales rep will benefit from this.

[Telecaster]

Hello

I wanted to hear everyone's thoughts on EIUL. Should I (a 25 year old) invest in EIUL or should I focus on investing in my 401k?

If you want to retire poor, an EIUL is great way to go.   But I suggest simply taking  a blowtorch to your money instead.  The result is the same as funding an EIUL, but at least you get the fun of watching it burn up.   

[MDM]

If you want to retire poor, an EIUL is great way to go.   But I suggest simply taking  a blowtorch to your money instead.  The result is the same as funding an EIUL, but at least you get the fun of watching it burn up.

+1
Great advice!