Updated: Oct 15, 2020
Today, I was on a webinar with one of the insurance companies I represent that was giving a new product overview of a life insurance policy being rolled out on November 1st and replacing their prior policies (due to a new mortality table EVERY insurance company is doing this). In this new product, there is something new called an 'index multiplier'. In short, in exchange for a fee on your cash values, you can have a potentially higher return (using a somewhat complex calculation). Here's my problem: Indexed Universal Life policies are designed and marketed as a way to "get a decent upside without the downside risks to your money". By using these index multipliers, you will have a FEE charged against either your return (with a good return) OR against your cash values if the market is flat or negative.
Here's problem #2: Every time a fee is charged against your cash values means LESS money to continue to compound long-term! This poses a SIGNIFICANT risk, particularly with increasing costs of insurance and borrowing costs in retirement years!
All this means is that you DON'T "avoid the downside risks" with these multipliers.