There are fees with IUL’s just like any other retirement product there are fees.  Your mutual fund has fees, your financial advisor charges you a management fee or trade fee, or a font load or backend load fee.   Anyone in the financial services business is in business to make money. It doesn’t matter if it is the company that oversees your employer pension or an individual advisor you are working with. They charge fees to you and the employer for managing.  Your bank charges fees.  Anytime you have money that is being managed or moved there will always be fees. Some people and organizations may not be transparent about the fees they are charging so you may not realize it. An IUL structured properly with the right company will have much less fees than what your financial advisor charges over the course of managing your money. When you work with our retire happy professionals we can run a fee analysis and show you a comparison.  Here are the typical expenses and fees in an IUL.  Fees are typically higher in the early years and decline in later years.  The overall fees are much less than those of a traditionally managed retirement account.  Cost of life insurance.  A portion of what you pay goes towards the cost of life insurance which is required by the IRS to have the ability to take your money tax-free as loans.  The IRS requires a certain amount of death benefit based on how much cash you would like to fund your IUL with.  Premium / Expense fees – This is a fee the life insurance company charges to manage the IUL.   Rider fees – If you choose to add any additional riders to the policy there may be an additional fee associated with the rider. Surrender fees – If you choose to cancel the policy and surrender it there is a surrender fee.  This is clearly stated in the IUL illustration.  You have an account value and surrender value.  The surrender value is the value after the surrender fee has been deducted.  Loan expense fees – When you take a loan there will be an interest loan fee.  Make sure you know what this is ahead of time before you commit to an IUL.  Some companies have a higher interest rate than others.  You should not go into an IUL if you are thinking of having for just a few short years or giving it a try.  This product is designed to benefit you the most when you look at it as a long-term solution like you would with your employer 401k or pension.   Important note: If your IUL is not structured properly, and the index returns a 0, and you have rider fees and or loan fees, you could potentially lose cash value due to the fees and cost of insurance.  It is not the same as market risk.