Exposing IUL Charges & Fees: What Most Clients Never See (But Should)

Why Professionals Trust LifeInsuranceReview.com for Unbiased, In-Depth Policy Reviews

As Insurance agents/brokers are not required to disclose many important information, including what's in the Illustrations.

When it comes to Indexed Universal Life (IUL) insurance, many clients believe they’re getting a smart, flexible policy that builds cash value and offers lifelong protection. But too often, the most important pages are never shown or explained—leaving clients in the dark about what they’re really paying for.

At LifeInsuranceReview.com (LIR), we regularly receive referrals from CPAs, estate planning attorneys, CFP® professionals, and investment advisors who want to ensure their clients are making informed decisions. In nearly every IUL case we review, the Policy Charges & Expenses page is missing—as is the Internal Rate of Return (IRR) page. These omissions are permitted by industry standards, but they still fail the transparency test, therefore is misleading and keep consumers from understanding the true cost of their policies.

🔍 Why These Pages Matter

These two pages—Charges & Expenses and Internal Rate of Return—are not required to be shown to the client when an IUL is sold. But they are critical for understanding the policy's real value.

Without them, clients cannot:

• See how much of their premium is lost to fees

• Accurately compare one policy to another

• Evaluate the true long-term performance of the policy

• Know whether the policy is sustainable or needs adjusting

If the client can understand the charges, they can understand the value—and ask better questions.

💸 The Hidden Charges Inside a Typical IUL

Let’s break down the common fees and charges buried in the fine print of most Indexed Universal Life (IUL) policies—rewritten here in plain English for easier understanding:

🔸 1. Premium-Based Charges

Fees deducted before your premium is applied to the cash value.

• Premium-Based Administrative Charges

  Covers federal taxes (like DAC) and state premium taxes.

  📉 Can take up to 7.5% right off the top of your premium.

• Sales Charges

  Covers commissions, advertising, and distribution costs.

  🕒 These fees are often concentrated in the early years of the policy.

🔸 2. Monthly Deductions from the Cash Value

These charges are taken directly from your account balance each month, reducing your cash value growth:

• Administrative ChargesPays for paperwork, policy servicing, and record-keeping.➕ Typically a flat monthly fee + a per-thousand coverage charge.⚠️ Often higher in the first 10 years.

• Transaction ChargesFees for making changes like withdrawals, fund transfers, or policy updates.🔁 Think of these like bank service fees.

• Cost of Insurance (COI)The biggest and most important charge.📊 Based on your age, gender, underwriting class, and how much death benefit you carry.🧨 COI increases over time and can quietly erode your cash value.

• Charges for Risk Factors (“Extras”)Extra fees for high-risk occupations, hobbies (like flying), or temporary medical ratings.

• Cost of Additional RidersCharges for benefits like long-term care riders, chronic illness riders, waiver of premium, etc.🧩 These can be valuable—but not always necessary.

⚠️ The Real-World Consequences of Omitted Information

Here’s what we see in real client cases:

• Policies underperforming significantly compared to what was projected

• Clients unaware that charges rise as they age

• No understanding of how fees impact long-term values and guarantees

• No way to compare their current policy to better-structured alternatives

🧭 The Role of LIR in Guiding Clients Through the Fine Print

At LifeInsuranceReview.com, our mission is to give clients the full picture—including what most agents and brokers leave out. We are fee-based professionals, which means:

• We charge a transparent fee for our review services

• We are not sales-driven—we’re analysis-driven

• If a client chooses to purchase new coverage or restructure an existing policy, we can facilitate the new policy and service it directly

We are licensed, experienced, and provide ongoing support for clients who choose to work with us after their review.

🧑‍💼 Why Trusted Professionals Refer Their Clients to Us

We are proud to work with a growing number of:

• CPAs

• Estate Planning Attorneys

• CFP® Professionals

• Fiduciary Investment Advisors

These professionals refer clients to us because they trust that:

• We act in the client’s best interest

• We provide transparent, unbiased analysis

• We expose what other agents often fail to disclose

• We help their clients protect wealth, not just buy a product

✅ What Every Client Should Ask For

If you own or are considering an IUL, ask your advisor or agent for the following:

• Full Policy Charges & Expenses Report

• Internal Rate of Return (IRR) Page

• Guaranteed vs. Non-Guaranteed Projections

• Breakdown of all riders and their costs

If they can’t—or won’t—provide them, it’s time to get a second opinion.

📞 Schedule a Policy Review with Confidence

If you or your clients own a life insurance policy—or are considering one—let us help you cut through the complexity.

At LifeInsuranceReview.com, we help uncover:

• Hidden costs - such as the exposing IUL charges & fees

• Unsustainable projections

• Better-performing alternatives

• Missed opportunities for tax efficiency and legacy planning

We’ve reviewed hundreds of policies, and in our experience, 8 out of 10 IUL policies need improvement—either due to poor design, incomplete disclosure, or misaligned goals.

🔍 Don’t Just Own a Policy. Understand It.

Visit LifeInsuranceReview.com to schedule your confidential review.We work directly with clients—and with their trusted advisors—to ensure clarity, confidence, and control when it comes to life insurance decisions.

💬 Frequently Asked Questions (FAQs) - Exposing IUL Charges & Fees

1. Why wasn’t I shown the Charges & Expenses page when I bought my IUL?

Because it’s not required by law to present that page. Many agents omit it to avoid drawing attention to the policy’s internal costs.

2. Are these fees standard across all IULs?

No. Fees vary widely by company, product, and how the policy is structured. Two IULs with the same premium could perform very differently depending on their charges.

3. What is the Cost of Insurance (COI), and why does it increase?

COI is the fee you pay for death benefit coverage. It increases as you age because the insurance company’s risk increases over time.

4. Can I see the internal rate of return (IRR) on my policy?

Yes, but it’s usually not included unless requested. We always include an IRR breakdown in our reviews to show how your policy may actually perform after fees.

5. If my policy is underperforming, can I fix it?

In many cases, yes. Depending on your health, goals, and timing, options may include restructuring, reducing costs, or replacing the policy.

6. What does LifeInsuranceReview.com charge for a policy review?

We’re a fee-based service. We charge a flat review fee for our time and expertise. If a client wants to move forward with a new or adjusted policy, we can help implement and manage it.