I get email advertising all the time from life insurance companies wanting to catch me in a weak moment and get me to jump on board with some breed of indexed universal life. Any breed really. Whether it is simple life insurance, or a bolder approach to wealth acquisition, or as in the case today, wealth preservation by using an IUL survivorship life insurance policy to avoid estate taxes or do an estate skipping wealth transfer to grand children.

I don’t want to say that this ad/email created an instant visceral gag reflex kind of reaction, but it did. The only thing worse than a bad idea is expanding on it and attempting to cover not one, but two lives with the same life insurance policy. Just a quick review. Survivorship, or second to die life insurance, was created to pay nothing on the death of the first spouse because there is an estate and income tax exclusion for life insurance that goes from one spouse to another. These life insurance policies pay on the death of the second spouse to create a pool of non income taxable money to pay estate taxes or to create an inheritance pool that skips both income and estate taxes by generation skipping. So here is the email I get touting this piece of garbage survivorship IUL. My comments underlined.

“Hello Everyone,

Survivorship Indexed Universal Life offers solid accumulation potential and lifetime protection with the strongest guarantees in the survivorship marketplace. It can help clients achieve protection, income, estate planning or wealth transfer goals with great flexibility.”


  1. Male Age 52, Female Age 48 – Possible they could need a survivorship policy at this age, but very highly unlikely. More likely the company thought this illustrated well.
  2. Preferred NT on Both
  3. Lifetime Payment


  1. No-Lapse life insurance- Guaranteed Death Benefit Protection to A104/100 (flexible design on the no-lapse design) – Again, what is the need at this age. To be more clear about my questioning the choice, at this age they would be rare to have a net worth high enough to need protection and likely have no idea about grand children yet. Where’s the need?
  2. Current Assumption life insurance- Guaranteed Death Benefit to A80/A76 With Cash Accumulation Opportunity – They current assumption has the same price tag as the guaranteed rates. One of the two options is supremely out of balance for the client.
  3. Overfunded life insurance- Same Premium Using a Minimum Non-MEC for Cash Accumulation / Supplemental Retirement Income. Overfunded with the same premium as the guarantee and the current assumption? You just can’t fix stupid!


  1. Providing Options For Your Client – All of which are bad!
  2. Lower Cost of Insurance Due to the Joint Mortality – Joint mortality was born in a day when people stayed married. I question its’ validity in the market at all in this day.
  3. First to Die Rider – Allows for Liquidity Upon the First Insureds Death – Why not buy term then?
  4. 2 and 10 – Guaranteed 2% Floor with a guaranteed 10% Minimum CAP (unprecedented in today’s IUL market place) – Did you know that the 2% floor won’t sustain the policy and the 10% minimum cap has never been achieved in consecutive years?


Click here to view the Summary of Plans

Bottom line. Why do agents get this kind of email solicitation daily? Because it’s good for the life insurance company, not you. If you have questions or have a friend or family member who is bugging you about IUL, or successfully hounded you into buying it even though your red flags were waving, call or email me directly. My name is Ed Hinerman. Let’s talk.