To assess an insurer, analyze their loss development triangles over 5-10 years. Consistently favorable development (reserves proving too high) signals a conservative, high-integrity management team that prioritizes balance sheet strength over short-term earnings.

Proponents of IULs often deflect criticism by claiming negative outcomes result from 'improperly structured' policies. However, a 'properly structured' policy requires paying exorbitant premiums relative to the death benefit (e.g., $1,000/month for a $150k policy), making it a financially illogical choice for most consumers.

A predatory sales tactic involves agents targeting immigrant communities and falsely claiming that their non-citizen status prevents them from accessing standard retirement accounts like a Roth IRA. They position expensive IUL policies as the only viable alternative for building wealth in the U.S.

If an IUL policy lapses while loans are outstanding, a disastrous tax event occurs. The entire amount loaned out beyond the premiums paid (cost basis) becomes immediately taxable as ordinary income, leaving the former policyholder with a massive, unexpected tax bill.

As a policyholder ages, the internal cost of insurance within an IUL policy increases annually. If premium payments remain flat, the policy begins to cannibalize its own cash value to cover these rising costs, eventually draining the account and causing the policy to lapse.

Indexed Universal Life (IUL) policies are marketed with downside protection, promising a 0% return in a down market. However, this ignores the significant fees and cost of insurance that are still deducted, resulting in an actual loss of principal for the policyholder.

IULs are often sold on the promise of tax-free retirement income, but this is achieved via loans against the cash value. All loans are inherently tax-free, whether from an insurance policy or a brokerage account. This is a misleading marketing tactic that frames a standard financial mechanism as a unique product feature.

Media headlines of 10% stock market returns are misleading. After accounting for inflation, fees, and taxes, the actual purchasing power an investor gains is far lower. Using real returns provides a sober and more accurate basis for financial planning.

Just as 1700s British aristocrats had lower life expectancies from accessing ineffective but expensive "quack" medicine, today's wealthy investors can access complex financial instruments that often act as financial poison. These products peddle hope but can dramatically increase the odds of ruin, a danger unavailable to ordinary investors.