Comparing a $100,000 Investment Portfolio (1999–2025) vs. a Properly Structured IUL Policy

Written By Adam Neuerburg
Investment Portfolio vs an IUL

Introduction

Investors often wonder how a well-diversified investment portfolio stacks up against a properly structured Indexed Universal Life (IUL) policy over the long term. In this analysis, we compare the performance of a $100,000 investment made in 1999 – allocated equally (25% each) to four components – with the performance of an IUL under similar conditions from 1999 through May 2025. We include total returns (with dividends/interest reinvested), typical advisory fees on the investment portfolio, and internal insurance charges on the IUL. We also highlight the built-in life insurance protection of the IUL and the cost of equivalent term life coverage needed for the investment portfolio.

Portfolio Allocation (25% each):

  • Bloomberg US Dynamic Balance Index II (or similar volatility-controlled index): A risk-managed index that shifts between equities (S&P 500) and bonds (U.S. Aggregate) to stabilize volatility.

  • Nasdaq Composite / Nasdaq-100 Index: A high-growth equity index (tech-heavy) representing Nasdaq stocks.

  • S&P 500 Total Return Index: A broad U.S. equity index including dividends (large-cap stocks).

  • PIMCO Total Return Fund (PTTRX or comparable): A core bond mutual fund (actively managed fixed-income).

Indexed Universal Life (IUL) Policy Assumptions:

  • Single $100,000 premium paid in 1999 by a healthy 35-year-old (non-smoker).

  • Annual point-to-point interest crediting tied to the S&P 500 index price (no dividends), with a 0% floor (no losses in down years) and no cap on gains (full index upside).

  • Policy charges (mortality costs, admin fees, etc.) based on industry averages for a max-funded IUL (designed for cash accumulation).

  • Death benefit: approximately $500,000 initial face amount (to meet tax guidelines and avoid MEC status), providing lifelong coverage. (The death benefit could vary; here we assume roughly $500K, which may increase or adjust over time as cash value grows).

Below, we break down the performance of each strategy, then compare final account values, annualized returns, and additional considerations like fees and insurance benefits.

Performance of the $100K Investment Portfolio (1999–2025)

Starting Allocation (Jan 1, 1999): $100,000 split evenly into the four components ($25,000 each). We assume annual rebalancing to maintain the 25% allocation in each segment. All dividends and interest are reinvested.

  • Nasdaq Index Segment: This portion experienced extreme volatility. During the dot-com boom, the Nasdaq-100 soared over +100% in 1999 (upmyinterest.com), then crashed with –36%, –33%, –37% losses in 2000–2002 (upmyinterest.com). It rocketed back +54.7% in 2009 (upmyinterest.com) and +48.4% in 2020 (upmyinterest.com), but also fell –41.7% in 2008 and –32.5% in 2022 (upmyinterest.com). Despite wild swings, a buy-and-hold of Nasdaq with reinvested dividends yielded strong growth. For example, from 1999 to 2025 the Nasdaq-100’s mean annual total return was about 12% (upmyinterest.com).

  • S&P 500 Segment: The S&P 500 (with dividends) had a gentler ride. It gained +21% in 1999 (slickcharts.com), then suffered a three-year decline (–9.1%, –11.9%, –22.1% in 2000–02) during the tech bust (slickcharts.com). The index recovered strongly, notably +28.7% in 2021 (slickcharts.com), but also had a major drop of –37% in 2008 (slickcharts.com). Over the full period, the S&P 500 Total Return index turned $100 into about $688 by 2025, a +588% cumulative return (approximately 7.6% annualized) (officialdata.org). This means the S&P portion (initial $25K) would have grown to roughly $172,000 by early 2025.

  • PIMCO Total Return (Bond) Segment: Bonds provided stability and income. The PIMCO Total Return Fund (PTTRX) – a flagship bond fund – benefited from falling interest rates in the 2000s. For example, the U.S. Aggregate Bond Index returned +11.6% in 2000 and +10.3% in 2002 (when stocks were down) (upmyinterest.com). However, bond gains were modest in most years (low single digits) and even negative in 2013 (–2%) and 2022 (–13% amid rising rates) (upmyinterest.com). Over 25+ years, investment-grade bonds have averaged only about 4% annually (upmyinterest.com). We estimate the $25K in PTTRX grew to roughly $80–$90K by 2025 (about 5% annual growth), smoothing out overall portfolio volatility.

  • Bloomberg Dynamic Balance Index (Volatility-Controlled) Segment: This index didn’t exist in 1999, but it simulates a risk-managed 50/50 stocks-bonds strategy with daily rebalancing to target lower volatility. In practice, this segment would have avoided the worst of equity crashes (shifting heavily into bonds during spikes in S&P volatility) and capped upside during exuberant bull runs. For instance, in 2008 when the S&P 500 plunged –38%, the dynamic index might have been nearly fully in bonds (which were +5% that year) (upmyinterest.com), resulting in a roughly flat or slight positive return. In strong equity years like 2013 (+32% S&P TR), the vol-controlled index would participate, though not fully (perhaps a mid-single-digit gain). Over the long run, we assume this segment achieved a moderate return on the order of ~5–6% annually. That would turn $25K into around $100–$120K by 2025. (For context, a 50/50 stock-bond mix returned about 4–6% in this era. The Bloomberg US Dynamic Balance Index II, launched later, shows hypothetical backtested growth with much lower volatility than the S&P 500.)

Total Portfolio Growth: Combining all four segments, the $100K diversified portfolio grew to roughly $700–$750K by the end of 2024, before any advisory fees. Through early 2025 (with the market down a bit year-to-date), the balance would be around $720K (estimated). This represents an overall 7.5–8% annualized gross return. Notably, the tech-heavy Nasdaq allocation supercharged the growth (especially post-2009), while the bond and vol-controlled pieces provided ballast during downturns. The worst drawdown for the portfolio occurred in 2008 (approximately –20% to –25% that year, versus –37% for the S&P alone), reflecting the benefit of diversification.

Impact of Fees: Most investment management firms charge an asset-based fee. We assumed a typical 1% annual advisory fee on portfolio assets (which is in-line with industry averages for managed accounts) (bankingtruths.com). After paying ~1% per year in fees, the portfolio’s net growth is reduced. Over 26 years, that fee drag is significant – roughly converting an 8% gross return into about ~7% net. Instead of $720K, the portfolio might end up closer to $550–$600K net after fees. (In other words, the advisory fees could consume on the order of $120–$180K of the gross growth over the period.) This fee-adjusted outcome is important for an apples-to-apples comparison with an IUL, which has its own internal costs.

Performance of the Indexed Universal Life (IUL) Policy (1999–2025)

How would a one-time $100,000 premium in an IUL policy have fared over the same period? We analyze year-by-year, considering the index credits (based on S&P 500 price changes) and policy charges.

Index Crediting Mechanics: The IUL uses annual point-to-point tracking of the S&P 500 price index, with a 0% floor and no cap on upside (and no dividend credit). This means: each policy anniversary, the change in the S&P 500 price over the past year determines the interest credited to the cash value. If the index was up, the gain (e.g. +10%) is credited in full; if the index was down or zero, a 0% floor applies (no loss, no gain for that year). Unused index losses do not carry over – the account simply stays flat in down years. This design protects the principal from market crashes at the cost of forgoing dividends and incurring insurance costs.

Let’s look at key periods and how the IUL would respond:

  • 1999 (Bull Market): S&P 500 price +19.5% (macrotrends.net). IUL credit: +19.5%. The $100K grows to $119,500. (The policy charges would be deducted after crediting – addressed shortly – but no cap means the full gain is credited.)

  • 2000–2002 (Dot-Com Crash): S&P price fell –10.1%, –13.0%, and –23.4% in three consecutive years (macrotrends.net). IUL credit: 0% each year (thanks to the floor). While a direct stock investment lost roughly –42% cumulatively over 2000–02, the IUL’s cash value did not decrease at all during those years – it simply held steady (aside from fees). This is a critical difference: the IUL avoided the steep drawdowns that the portfolio’s equity components suffered. By the end of 2002, the IUL account would still be around its 1999 level (slightly lower after insurance charges), whereas the stock portfolio’s equity portions were deeply underwater.

  • 2003–2007 (Recovery and Expansion): The S&P rebounded strongly. For example, 2003 saw +26.4% price growth (macrotrends.net), and 2006 +13.6%, etc. The IUL would capture these annual gains: e.g. +26% in 2003, +9% in 2004, +3% in 2005, +13.6% in 2006, +3.5% in 2007 (using S&P price changes each year (macrotrends.net). By the end of 2007, the IUL’s credited interest over this 5-year span would cumulate substantially. Notably, in 2005 the S&P was up only ~3% – a year of very modest gain, but still positive, so the IUL gets that ~+3% interest (whereas a cap might have limited a bigger year if it occurred – but here no cap was needed due to moderate returns).

  • 2008 (Financial Crisis): S&P 500 index plunged –38.5% in price (macrotrends.net). IUL credit: 0%. The policy is again shielded by the floor – it does not lose cash value due to the market collapse. This is a pivotal year: while the traditional portfolio lost a substantial chunk (even the balanced allocation dropped roughly 20%+ in 2008), the IUL took no market loss (though it would still incur insurance charges that year). The difference is stark: avoiding a –38% loss means the IUL didn’t have to “climb out of a hole” in subsequent years – its gains in 2009 and beyond would be on the still-intact principal.

  • 2009–2014 (Post-Crisis Bull Market): Stocks rallied hard. The S&P’s price gains were +23.5% in 2009, +12.8% in 2010, ~0% in 2011, +13.4% in 2012, +29.6% in 2013, +11.4% in 2014 (macrotrends.net). The IUL credits would match these positives (0% in 2011 since the S&P price was flat to slightly down that year (macrotrends.net)). Particularly beneficial were 2013’s +29.6% and 2014’s +11.4% – years in which an IUL with a cap might have been limited, but our scenario has no cap, so the policy captures the full upside. By 2014, the IUL’s cash value would have compounded significantly from the 2008 level, thanks to consecutive double-digit credits in many years.

  • 2015: The S&P 500 price index had a slight decline (–0.7%) (macrotrends.net). IUL credit: 0% (flat). Meanwhile, the S&P 500 Total Return was +1.4% in 2015 (slickcharts.com), meaning the only gains came from dividends (which the IUL doesn’t get). So 2015 is an example of a small opportunity cost – the portfolio’s S&P fund eked out a tiny gain via dividends, whereas the IUL got zero. This pattern holds for any flat year where dividends make the difference between a slightly positive total return and a negative price return.

  • 2016–2021 (Extended Bull Run): A strong run for equities. S&P price returns were +9.5%, +19.4%, –6.2%, +28.9%, +16.3%, +26.9% from 2016 through 2021 (macrotrends.net). The IUL would post corresponding credits of +9.5%, +19.4%, 0%, +28.9%, +16.3%, +26.9% in those years. Notably, 2018 saw a –6.2% price drop (IUL got 0%), but the very next year 2019 jumped +28.9% (macrotrends.net) (IUL gets full benefit). By the end of 2021, the policy would have enjoyed many years of uninterrupted growth (only a couple 0% years in the 2010s).

  • 2022 (Bear Market): S&P price –19.4% (macrotrends.net). IUL credit: 0%. Once again, the floor kicks in to prevent a loss as markets fell sharply amid a global downturn.

  • 2023: S&P roared back about +24% in price (macrotrends.net). IUL credit: ~+24%. No cap means the policy captures the strong rebound after 2022’s floor protection.

  • Early 2025: Year-to-date 2025, the market has been slightly negative (through May, the S&P 500 was down a few percent). If 2025 were to finish negative, the IUL credit for 2025 would be 0% again – preserving the gains accumulated through 2024.

Cash Value Growth: The effect of the 0% floor is that the IUL’s cash value never had to fight through the large losses that hit the investment portfolio. Instead, it either grew or stayed level each year (before fees). This leads to a higher compound growth rate because avoiding big drawdowns is key to maximizing geometric returns. To illustrate: the S&P 500’s compound return with dividends was ~7.6% (officialdata.org), but the IUL (tracking S&P price with no losses) achieved a higher effective compound rate. Based on the series of yearly index credits outlined, the IUL’s gross crediting rate (before insurance costs) comes out to roughly 11–12% annualized over 26 years. This is because the policy got nearly all the up years, but none of the down years – a huge advantage. However, we must now account for policy charges, which will reduce the net growth.

Policy Charges and Fees: An IUL is not a free ride – the insurance company deducts various charges to cover the cost of insurance (death benefit risk), administration, and policy expenses. These charges include: a premium load (often a small % of premium up front), monthly admin fees, and mortality charges (cost of insurance based on age and the net amount at risk). In early years, charges are relatively high (covering sales expenses and insurance risk while the insured is younger). In later years, many charges drop off, and the policy cost is mostly the pure cost of insurance on the net amount at risk (which shrinks if the cash value grows closer to the death benefit).

For a well-structured, max-funded IUL, total charges might average around 1–2% of the account value per year over the long term (bankingtruths.com, policyengineer.com). (In the first policy decade, charges can be higher; after about 10–15 years, they often taper down to under 1% of cash value as the policy becomes very efficient) (bankingtruths.com.) This is comparable to the annual fees in many mutual funds or managed accounts, with the difference that the IUL’s charges also pay for a life insurance benefit.

For our analysis, we assumed an average ~1.5% annual charge against the cash value. After applying this cost drag, the IUL’s net growth is reduced from the ~11–12% gross crediting to roughly 9–10% per year net. In real dollar terms: the $100,000 premium could have grown to approximately $1.1–$1.2 million in cash value by mid-2025 (net of all internal policy fees). This is a dramatic increase – roughly double the ending value of the fee-adjusted investment portfolio. Even if charges were a bit higher, the IUL would likely still have outperformed the 60/40-ish portfolio thanks to the power of downside protection. One industry analysis of IUL charges showed that over a policy’s lifetime, fees averaged about 1.5% of assets, eventually resembling the cost of low-cost index funds in later years (bankingtruths.com). Our estimates are in line with that. Importantly, those fees bought something the investment portfolio’s fees did not: life insurance coverage.

Death Benefit and Protection: Throughout the period, the IUL policy provides a life insurance death benefit that would be paid to the beneficiary if the insured passed away. In our scenario, the initial death benefit was around $500,000 (at age 35). By design, as the cash value grows, either the death benefit increases (Option B/Level to maintain a corridor) or the net amount at risk decreases (Option A/Increasing). In either case, the policy always provides at least hundreds of thousands of dollars in coverage. By 2025, for example, the cash value might be $1.1M and the death benefit perhaps $1.15M (just as an example). This built-in protection has significant value and needs to be considered in the comparison.

Term Life Insurance Cost to Replicate IUL’s Protection

If one chose the traditional investment route, they would need to buy separate term life insurance to match the IUL’s death benefit protection. The cost of term insurance for a healthy 35-year-old can vary based on coverage amount and term length:

  • A 20-year level term policy for $500,000 coverage might cost on the order of $25–$30 per month (around $300–$360 per year) (moneygeek.com).

  • A longer 30-year term (to cover from age 35 to 65) is more expensive – roughly $80–$100+ per month for $500K coverage (male rates are higher)【12†】. That’s about $1,000–$1,200 per year. For a $1 million policy, costs roughly double (e.g. around $69 per month for a shorter term, or close to $150–$200 per month for a 30-year term) (progressive.com, ethos.com).

So, to approximate, an investor securing $500K–$1M of term life in 1999 would likely pay around $600–$1,200 per year on premiums (depending on coverage and term length). Over 26 years, those term premiums could sum to $15,000–$30,000 (or more if coverage extends full 30 years). If the individual only bought a 20-year term (1999–2019), by 2020 they’d have no life insurance in force, whereas the IUL’s coverage persists for life (as long as the policy is kept active).

In our comparison, we already accounted for the investment portfolio’s advisory fees, but not the cost of term insurance. In reality, if we were truly matching the IUL, we’d deduct term premiums from the investor’s cash flows. Doing so would further reduce the net investment results. For example, paying $1,000/year for term could have otherwise been invested – over decades that opportunity cost could easily exceed $40K in lost portfolio value (assuming moderate growth). The IUL’s fees, on the other hand, inherently cover the insurance component. In essence, part of the IUL’s “expense” is providing the death benefit – which the traditional portfolio had to pay separately for (and only for a limited term). The IUL’s insurance also guarantees a payout (the death benefit) no matter when death occurs, even if early. Term only pays if death occurs during the term, otherwise it expires worthless. This added value of permanent coverage is hard to quantify in pure investment terms, but it’s a key difference.

Results Summary: Portfolio vs. IUL

  • Final Account Values (Through May 2025): The $100K investment portfolio (25% each in vol-control index, Nasdaq, S&P TR, and PIMCO bonds) would be worth approximately $720,000 gross by early 2025. After a typical ~1% advisory fee, the net value is about $550–$600K. In contrast, the $100K IUL policy cash value grew to roughly $1.1 million (net) over the same period (assuming no withdrawals). The IUL’s death benefit of ~$500K (or higher) was in force the entire time, whereas the investor would have needed to maintain separate life insurance. The IUL clearly shows a higher ending cash value in this historical scenario.

  • Annualized Returns: The portfolio achieved roughly 7–8%/year gross, which falls to ~6.5–7%/year net after fees (in line with a balanced equity/bond portfolio’s long-term performance). The IUL’s crediting yielded about 9–10%/year net to the cash value after insurance charges, significantly boosted by the elimination of down-year losses. It’s worth noting that the S&P 500’s price-only return over this period was around 6% annually – the IUL was able to beat that by avoiding negative years and continually compounding on a non-decreasing principal. The cost of insurance did drag on returns, but as shown, not enough to overcome the floor’s advantage. In essence, the IUL earned equity-like returns with bond-like risk (volatility), which is an attractive combination.

  • Risk and Drawdowns: The investment portfolio experienced multiple steep drawdowns (>–20%) and year-to-year volatility. An investor needed discipline to stay invested through two major crashes (2000–02 and 2008–09) and the 2020 pandemic plunge. In contrast, the IUL’s cash value never had a single year of decline – the worst it ever did was 0% in a bad year. This smooth ride can be psychologically comforting and protected the cash from sequence-of-returns risk. The trade-off is that the IUL only credits index price changes (no dividends), and ongoing charges are present regardless of market conditions. Even so, the downside protection proved extremely valuable in this historical period.

  • Tax Considerations: Although not the focus of this question, it’s worth noting that IUL cash value grows tax-deferred, and if structured properly, can be accessed via policy loans tax-free in retirement. The investment portfolio in a taxable account would owe taxes on dividends, interest, and realized capital gains each year (which would further reduce net returns unless held in a tax-advantaged account). We have not explicitly accounted for taxes in the portfolio results. If we had, the portfolio’s outcome would look even less favorable relative to the IUL (which, being an insurance product, effectively functions like a Roth account if managed correctly). This is an additional layer to consider in real-world comparisons.

  • Insurance Benefit: By design, the IUL provides a death benefit payout to heirs, essentially bundling an investment and insurance in one. The traditional approach requires buying insurance separately. For a fair comparison, one must acknowledge the extra value of the life insurance in the IUL. Even if the IUL’s cash value had merely matched the portfolio, the presence of (at least) a $500K tax-free death benefit tilts the scales in its favor when evaluating overall benefit to the policyholder’s family/estate. As one analyst quipped, “No index fund will give your family a $1 million check if you die – an IUL will.” (bankingtruths.com) This highlights the unique dual-purpose nature of the IUL.

Assumptions and Caveats

It’s important to outline the assumptions behind this analysis and acknowledge that results can vary under different conditions:

  • Historical Bias: We used actual historical index returns from 1999–2025 for stocks and bonds. Past performance is not a guarantee of future results. The period analyzed was favorable for the IUL strategy (multiple severe bear markets where the 0% floor added huge value). If the market had instead gone straight up with no major down years, the IUL’s floor would be less valuable and its lack of dividends could make it lag a pure equity investment. The comparison’s outcome could differ in a different 26-year window.

  • IUL “No Cap” Assumption: We assumed an uncapped strategy with full 100% participation in the S&P 500 price index. In reality, many IULs in 1999 had caps on annual returns (often capping at, say, 12% or so) which would limit upside. Today, “no cap” options exist (which is what we prefer to offer) by using volatility-controlled indices or charging an index spread. Our use of the Bloomberg Dynamic Balance Index in the portfolio was partly to mirror what an IUL might use to offer an uncapped credit. We essentially gave the IUL the benefit of no cap and 100% participation. Some modern IUL products do offer uncapped S&P segments with a spread (e.g. credit the index gain minus a fee) or use indices like the Bloomberg Dynamic Balance that can be uncapped. In our analysis, we effectively assumed an ideal scenario for the IUL crediting. A cap or lower participation rate would reduce the IUL’s performance. For example, if a cap had limited each year’s gain to (say) 12%, the IUL would not have captured the full 20–30% years, and the ending value would be lower (though still likely quite competitive due to the floor). Always consider the actual product parameters.

  • Policy Costs: We applied an approximate average charge to the IUL. Actual policy expenses depend on the insurer, product, insured’s age/health, death benefit amount, etc. We assumed an efficient, max-funded policy (minimum death benefit for the given premium) to minimize charges relative to cash. If an IUL was not structured for accumulation (e.g. had a higher death benefit than necessary or was not funded optimally), the internal cost ratio would be higher and the cash growth would slow. We also assumed the policy was maintained in force throughout and not surrendered (surrender charges in early years can reduce cash value if one exits the policy too soon). The 1.5% average fee we used is an estimate; a well-designed policy might do better. Industry sources note that over time the annual cost of an IUL policy can drop to around 0.5–1% of cash value in later years (bankingtruths.com). In any case, we did include the drag of insurance costs, which many simple “illustrations” of index crediting might ignore.

  • Portfolio Management: We assumed annual rebalancing and a static 25% allocation to each asset class. In reality, an advisor might tactically shift allocations or use different funds. We used index returns for the Nasdaq and S&P segments and assumed the PIMCO fund performed similar to the Agg index. The Bloomberg Dynamic Balance Index II was back-tested from 2005 onward; we approximated its effect using a 50/50 mix. These are simplifications, but they provide a reasonable reflection of a moderate-risk diversified portfolio. We also assumed the advisory fee at 1% throughout. Some investors might DIY invest with lower-cost index funds (paying much less in fees), which would improve the portfolio’s relative performance. Alternatively, higher fee arrangements or fund expense ratios would further reduce it. The fee-adjusted portfolio outcome we presented is typical for a professionally managed account (bankingtruths.com), but individual results will vary.

  • Behavioral Factors: The comparison so far is numeric, but one should consider investor behavior. The portfolio had several gut-wrenching declines – not everyone stays invested through those. An investor who panicked and sold low would have hurt their returns significantly. The IUL, by virtually eliminating visible losses, may encourage “staying the course” since the worst you see is a 0% credit (no loss of prior principal). This can be a real psychological benefit. On the flip side, the IUL’s steady-but-slower growth in prolonged bull markets might test one’s patience if they see the stock market roaring ahead. These behavioral aspects can affect realized outcomes for real people.

Conclusion

Over the 26-year period from 1999 to 2025, a properly structured IUL policy outperformed a balanced investment portfolio in our analysis – both in terms of accumulation value and risk-adjusted return. The IUL’s ability to avoid market losses proved decisive; it captured much of the bull market gains while sidestepping the bear market drawdowns. Even after accounting for insurance costs, the IUL’s cash value grew to roughly double that of the comparably allocated stock/bond portfolio (after typical investment fees).

In addition, the IUL provided something the investment portfolio could not: a permanent life insurance benefit. To match this, the investor would have paid for term life insurance (an added cost not reflected in the portfolio’s returns). According to one source, a $1 million term policy for a healthy mid-30s individual might cost around $69 per month at minimum (progressive.com) – a cost that would compound over the years. The IUL bundled that coverage inherently, with the policy charges supporting the insurance component as well as the investment growth. Had the worst happened, the IUL’s beneficiaries stood to receive the life insurance payout income-tax free, whereas the investment account (even with separate term insurance) may not have been as efficient or guaranteed.

It’s important to stress that this outcome hinged on the specific market history. The last two decades rewarded the IUL’s guarantees due to multiple severe downturns. The value of the 0% floor cannot be overstated – it effectively put a hard stop on losses, enabling the subsequent gains to compound from a protected level. In different market conditions (e.g. fewer downturns or lower volatility), the gap might be smaller. Likewise, different IUL product terms (caps, higher costs) could change the result.

Bottom Line: In this case study, the IUL delivered competitive – even superior – long-term growth compared to a traditional investment portfolio, when factoring in all returns, fees, and insurance benefits. It achieved equity-like returns (~9%+) with dramatically lower volatility and provided peace of mind through guaranteed death benefit protection. The diversified stock/bond portfolio certainly grew substantially (no one would scoff at turning $100K into half a million+), but it experienced bumpy swings and required separate insurance for protection. The IUL, as designed in our scenario, emerged as a compelling alternative for those seeking growth with safety.

However, one should approach such comparisons with a full understanding of assumptions. Real-world product selection and personal financial context matter. An IUL must be funded and managed properly to deliver these outcomes (e.g. avoiding lapses, not becoming underfunded, etc.). On the flip side, investment portfolios can be optimized (low-cost index funds, tax-efficient accounts) to improve their performance. Thus, while our analysis highlights the potential of an IUL, individuals should consult financial and insurance professionals to evaluate based on current products and their specific needs.

Sources:

Adam Neuerburg
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Nasdaq Investment vs. Fixed Indexed Annuity (1999–2025) – A Performance Comparison