90 • MARTIN H. RUBY
Truthful Scale: * Here’s one of my favorite myths about IUL, because it’s so easy to dispel. There’s a common refrain: life insurance is too expensive to use as a savings tool. What this means is that life insurance con- tains fees. So do 401(k)s. 17 And IRAs. 18 And Roth IRAs. So when people tell me, “IUL is too expensive,” I always ask them, “Compared to what?” Let’s look at the fees you could pay in each kind of account.
401(k)
IRA
IUL
Administrative Fees – fees that pay the company adminis- tering your account Management Fees – fees that pay for the management of as- sets in certain kinds of funds
Advisor Fees – fees to the person man- aging your funds for managing your account Managed Account Fees – fees that pay for the creation of a portfolio within your account Fund Fees – fees for the mutual funds or other funds held in your account
Mortality Fees – fees that support your life insurance death benefit Expense Fees – fees that support the expenses of es- tablishing, under- writing and managing your ac- count
Fund Fees – fees for the mutual funds or other funds held in your account
17 U.S. Department of Labor. “A Look at 401(k) Plan Fees.” http: // www.dol.gov / ebsa / publications / 401k_employee.html.
18 Robert Powell. MarketWatch. Aug. 10, 2010. “No free lunches, no fee-free IRAs.” http: // www.marketwatch.com / story / no-free-lunches-no-fee-free-iras-2013-08-10.
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