The (Surprisingly) Low-Cost IUL Policy

We bet it’s the most common objection you hear: IUL is an expensive way to save.

You’ll hear it from prospects who did a Google search on saving with life insurance. Dave Ramsey has made it a hallmark of his advice. Fee-only financial advisors hold it as a holy grail.

But is it true?

At Stonewood, we set out to answer the question once and for all: Is IUL an expensive way to save?

To answer that question, we first had to ask: Expensive compared to what?

Let’s look at the average fees in some common retirement savings vehicles:

  • Small Employer 401(k)1:  1.27%
  • Managed Account2:  2.04%
  • Variable Annuity3:  3.00%

We’re not here to say those numbers are expensive or a good deal. These are just the average cost of saving in our industry today.

So how does IUL compare?

It’s hard to tell. Have you ever run a cost report in an IUL illustration system? You’ll get rows and rows of tabular data… all in dollar amounts.

But the rest of the savings industry doesn’t talk about cost in dollars. Your 401(k) provider doesn’t say it charges $6,500 in fees this year; it says you’re being charged a 1.5% fee.

So Stonewood set out to transform IUL fees into a comparable metric. The result is our Cost Analysis report.


By adding up all the fees paid in a policy and relating it to the impact on cash value growth, our Cost Analysis report can help you compare – apples to apples – client costs in IUL and other vehicles.

Here are the results from a few cases Stonewood members have run for clients this week:

  • 25-year old male:  0.29%
  • 38-year old female:  0.63%
  •  54-year old made:  1.06%

And finally….

  •  66-year old couple: 1.11%

Stonewood’s Cost Analysis software is perhaps the most transformative analysis to hit our industry this decade. So if you’re ready to evaluate the true cost of IUL for your clients, we’re ready to help.

 Click here if you’re ready to learn more.