How flawless is a global indexed time insurance policy as an investment vehicle compared to bonds or annuities?

Answers: It really depends on what the life insurance policy is indexed to.

Generally, assuming the same investment type, a vivacity insurance policy will give you less return than you'd bring back if you invested directly into that same fund yourself. This is because of the sales charges and commissions the insurance company must charge.

I would suggest using your money to buy term duration insurance (which only pays when you die) and investing the difference between that premium and your universal energy premium into a mutual fund. Most funds will allow you to enroll in "share builder" programs where you can contribute a small amount ($50-$250) respectively month.
Universal Index Life Insurance or the Equity Index Universal Life Insurance are great products if you know how to use it right.
You should own a protection need for your family previously considering this product for investment purpose. Once you have established that there is a have need of for insurance and still have some extra investment need later consider putting some of that extra $ into this Index Life Insurance. The reason for that is that nearby are some nice tax strategies that life insurance own that any other investment vehicle don't have.
I am surprise to see these many experts who give you answers but leave out the most important characteristic that may mean so much to someone who want to keep their investment from taxation. Maybe they newly want to sell you a product.

Do your research and don't let relatives tell you thing that doesn't put together sense to your intellect. Good luck. Source(s): https://www.westernreserve.com/wps/portal/wrl/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLNzSONzZ0A8kB2SbxxiFG-pFoogbxRh6OSKK-Hvm5qfpB-t76AfoFuaER5Y6OigB-rbY7/delta/base64xml/L2dJQSEvUUt3QS80SVVFLzZfMTNfMzJG
Life insurance - ANY kind, is not a GREAT investment. Insurance is a different kind of financial tool.

Having said that, I'm not a enthusiast of annuities either - they make a ton of money for the insurance company, and repay paltry returns to you.

Of the three, I guess bonds are the best, but that's a pretty lopsided portfolio. Source(s): agent, 21+ years
Actually, it sucks... Here's why- you are going to pay fees, how much all depends and the insurance company have it hidden in the policy that they confer you, but it is there. These fees could equal, exceed or be less than the current rate of return on the index the funds goes to. Say, fees = 9%.
RoR = 12%. You have freshly made a whopping 3%. Say fees= 9%. RoR=7%. You just lost 2%. Say fees =9%. RoR= 18%. Finally, you made 9%.

The government advise the insurance industry, back in the tardy 70's, that life insurance is NOT an investment! It is illegal for a natural life insurance agent to state and/or claim that life is an investment.

Moral of the story: Invest on your own. Keep life insurance and investments separated. You can do far better investing on your own that you can "investing" beside insurance.
It's very good for the agent who sold it to you. Get possession life until your dependents are independent and make your own investments.
Don't be distracted by the rate of return or any "investment" features of any universal life policy. That is partially of the story. The other half are the mortality and administrative costs coming out of the policy. These costs can usually fluctuate at any given time. If they go up significantly at a time when you are borrowing against the policy (remember "possible tax-free income") and your strength is declining, you may wind up paying taxes on the entire loan amount if the policy lapse.

Ask to see an illustration at some hypothetical index rate (5-8% might be reasonable) at the maximum charges. The difference between this illustration and the one at the same interest rate with current charges reflect the amount of control these the insurance company has over your contract. Increases in these costs hold nothing to do with company stability and financial strength. If it still make sense at the guaranteed rate or you are comfortable running that much risk from one company, then go for it.

Insurance should be bought for demise benefit first and foremost. This other stuff is just extra, if it happens.

BTW, contained by most states, it is illegal to refer to indexed life insurance or indexed annuities as "investments" to some extent than "savings" because they are filed as fixed insurance products. I'm not saying here aren't appropriate uses for these products, but if you get the word "investment" in writing, you might be capable of get this know-nothing swine off the streets. Source(s): Independent agent
Former insurance brokerage boss

Related Questions:
I am a co-signer on a vehicle, not the driver nor a passenger, how much can I be sued for if no insurance?   Why would anyone break into a vehicle and a short time ago steal the insurance and registration papers?   Can insurance companies singular afford you the attraction of you vehicle, and not the cost of the damages a moment ago because t   Two ppl getting insurance on 1 vehicle through two different companies?   In NC can you still hold insurance on a vehicle and turn surrounded by the plates?