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It’s been over two decades—twenty-one years, to be exact—since Transamerica Life Insurance Company introduced and began selling its very first Indexed Universal Life Insurance policy, commonly known as an IUL. That initial launch marked a major shift in the life insurance industry, as it introduced a product that combined elements of traditional life insurance with market index-linked crediting strategies.
Since that time, more than 40 other insurance companies have followed in Transamerica’s footsteps, recognizing an opportunity to boost their own bottom line. By adopting the IUL model, these insurers discovered they could increase their profits while taking on less financial risk compared to other types of life insurance products. From a business standpoint, it’s been a strategic move—allowing carriers to grow revenues without the exposure that comes with more traditional, fully guaranteed policies.
However, this growth in profitability for the insurance companies hasn’t always translated into favorable outcomes for policyholders. In fact, while the IUL has been marketed as a flexible and high-potential product, many individuals who have purchased these policies have found that the actual performance often falls short of expectations. Hidden fees, complex structures, and unpredictable crediting methods have left some policyholders disappointed, questioning whether the benefits really outweigh the risks.
Here are just 10 reasons why.
The list of differences between Indexed Universal Life Insurance (IUL) and Participating Whole Life Insurance Policies (PWLIP) could go on and on—but in the interest of space and time, we’ll keep it simple. The bottom line is clear: IUL policies expose policyholders to more risks than PWLIP contracts do. Why? Because it all comes down to one difference—guarantees. Participating Whole Life Insurance Policies are built on a foundation of contractual guarantees, while IUL policies simply don’t offer the same level of certainty or security. Those guarantees—the kind that promise steady growth of cash value and a guaranteed death benefit—are entirely absent from IUL contracts.
To drive the point home, let’s take a quick walk down memory lane. In 1984, a tiny but fierce 81-year-old woman named Clara Peller became a household name when she looked into the camera and famously asked, “Where’s the beef?” That one pointed question sparked a national catchphrase and led to a 31% boost in sales for Wendy’s hamburgers—because yes, they really did have more beef than their competitors. Clara simply voiced what everyone else was thinking, and the public took notice.
Well, here we are—twenty-one years after Transamerica introduced the first IUL policy—and it’s time for today’s policyholders to start asking their own obvious question: “Where’s the guarantee?” Because when it comes to life insurance, PWLIP delivers far more in terms of stability, predictability, and long-term value. The guarantees built into whole life insurance are real, contractual, and time-tested. If your goal is to protect your wealth, minimize risk, and ensure a solid financial foundation for the future, you owe it to yourself to pay attention to this critical distinction. Just like Clara Peller did, it’s time to stand up and demand substance—because when it comes to life insurance, guarantees are the “beef” you simply can’t afford to do without.
Tomas P. McFie DC PhD
Tom McFie is the founder of McFie Insurance and co-host of the WealthTalks podcast which helps people keep more of the money they make, so they can have financial peace of mind. He has reviewed 1000s of whole life insurance policies and has practiced the Infinite Banking Concept for nearly 20 years, making him one of the foremost experts on achieving financial peace of mind. His latest book, A Biblical Guide to Personal Finance, can be purchased here.