CASE STUDY: Review of IUL Illustrations – Details Matter Too!
- LIR TEAM
- Jun 21
- 5 min read
Why Consumers Turn to LifeInsuranceReview.com for Unbiased Policy Reviews and Empowered Decisions
When it comes to Indexed Universal Life (IUL) insurance, the difference between a wise financial strategy and a regretful decision often lies in the fine print—and more specifically, in the pages that brokers don’t show you. At LifeInsuranceReview.com (LIR), our mission is to empower consumers with unbiased, expert-level insight so they can fully understand what they’re buying and avoid being misled by polished sales pitches.
⚠️ The Case: A IUL from a Well-Known Mutual Life Insurance Company
Recently, LIR was asked to conduct a policy review on an IUL illustration tied to a 1035 exchange sale—meaning the client was sold a new policy.
On the surface, the illustration seemed comprehensive: 41 total pages showing how the policy could perform: growth potential and policy projections.
But what we discovered was alarming!
Despite the impressive length, two critical pages disclosures were intentionally left out of the client’s illustration packet—pages that would have revealed essential cost and return information.
🚨 What's Missing Can Hurt You
1. Annualized Expense Charges & Deductions Page
This page breaks down the internal policy charges: cost of insurance (COI), administrative fees, premium load charges, etc. What’s deceptive is that:
These costs are only shown based on current, non-guaranteed assumptions.
They can increase later, but you won’t see that unless you ask for a guaranteed charges report.
In most IULs, fees are front-loaded in the first 10 years, meaning you may see poor performance even if the index performs well.
Without this page, the client had no idea how much of their premium was being eaten up by expenses—crucial info if you're comparing different products or evaluating long-term value.
2. Internal Rate of Return (IRR) Page
This page is the reality check. It calculates the net return on your money after all costs. It helps cut through the fluff of a high "illustrated rate" (in this case, the max allowable 6.68%) and shows what the actual outcome might be.
And yet, this too was left out.
📉 Words Matter: Breaking Down the Language in the Illustration
We carefully reviewed all 41 pages of the provided IUL illustration. Here's what we found:
Phrase Used | Count |
"not likely to occur..." | 12 times |
"unlikely" | 1 time |
"non-guaranteed" | 82 times |
"not guaranteed" | 23 times |
"assume / assumes / assumed" | 43 times |
"assumption" | 18 times |
That’s over 179 mentions of doubt, uncertainty, and hypothetical outcomes in a document that's supposed to guide a permanent financial decision.
🔍 The Reality: IUL Illustrations Are Hypothetical Models, Not Promises
Insurance companies are very clear—though often buried in fine print—that illustrations are not guarantees. They’re just mathematical models based on a snapshot of today’s assumptions. Next year? Everything could change: caps, participation rates, fees, policy charges—even the index strategy itself.
That’s why LIR warns: Don’t rely on illustrations alone. They are sales tools, not legal contracts.
✅ Why LifeInsuranceReview.com Is the Trusted Expert Resource
At LIR, we serve as independent consumer advocates—not agents trying to make a commission. We’re licensed professionals who know what to look for, how to decode the illustrations, and what to ask that agents won’t voluntarily disclose.
Our promise to you:
No sales pressure. We don’t sell policies—we help you understand them.
No hidden agendas. We work for you, not the insurance company.
No confusion. We explain your policy in simple terms.
No assumptions. We base our recommendations on facts, not projections.
Whether you're evaluating a new IUL, reviewing an old one, or considering a 1035 exchange, we help you make informed, confident decisions—with all the details, not just the sales highlights.
💡 Final Thought
The IUL in this case study looked solid on the surface, but when we dug deeper, the picture changed drastically. Without the missing pages, the client would have committed to a policy with unknown costs and inflated expectations.
Remember:
If you don’t see the fees, IRR, and guaranteed charges—you’re not seeing the full picture.
Let LifeInsuranceReview.com help you uncover the details that matter before you sign anything.
📌 Quick Takeaways:
IUL illustrations often leave out critical cost and return info.
Key pages like Expense Charges and IRR are not required by law—but are essential for transparency.
Sales illustrations use high assumptions that may never materialize.
LifeInsuranceReview.com helps you review, compare, and understand your policy like a professional would.
If you're thinking about purchasing, exchanging, or reviewing an IUL policy, start with the facts. Start with a review. Start with LifeInsuranceReview.com.
FAQs: Understanding IUL Illustrations & Policy Reviews
1. What is an IUL illustration and why is it important?
An IUL (Indexed Universal Life) illustration is a projection of how a policy might perform based on current assumptions like interest rates, index performance, and policy charges. It’s important to review it carefully, but remember—it’s not a guarantee.
2. Why are some critical pages, like fees and IRR, missing from my illustration?
Insurance companies are not required to include the Annualized Expense Charges or Internal Rate of Return (IRR) pages in all illustrations. These pages reveal the true cost and net return of your policy. At LifeInsuranceReview.com, we help ensure you always see and understand them.
3. Is the illustrated rate (like 6.68%) what I can expect to earn?
No. The illustrated rate is based on maximum assumptions allowed by regulators. It’s hypothetical and does not reflect future performance. Most IULs rarely achieve the full illustrated rate consistently, especially after fees.
4. What do terms like "non-guaranteed" or "assumed" really mean in these documents?
These terms signal that the projections are not promises. They are based on today's figures but can change. When "non-guaranteed" appears dozens of times, it’s a clear sign to proceed with caution and ask more questions.
5. Can LifeInsuranceReview.com help with policies I already own?
Absolutely. We specialize in reviewing existing life insurance policies—especially IUL and Whole Life. We identify if your policy is underperforming, overpriced, or has better alternatives before it’s too late.
6. Why should I trust LifeInsuranceReview.com over an agent or broker?
Unlike agents who are often incentivized to sell specific products, LIR offers independent, conflict-free reviews. Our only job is to protect and inform you, the policyholder—so you can make the best decision with complete clarity.
CASE STUDY Review of IUL Illustrations - CASE STUDY Review of IUL Illustrations
CASE STUDY Review of IUL Illustrations
