Those who are too old or too young may not benefit from an Indexed Universal Life product. As you consider how your age will impact your suitability for this type of solution, there are two primary questions to ask:
Question #1) Will the cost of insurance, due to my advanced age, prevent the product from performing as desired?
At a certain age, the internal costs of an IUL may be large enough to eliminate the benefits that an IUL policy offers. Also, benefits may also be hindered if you are too close to the time you would need to take funds from your new IUL policy.
Question #2) Does your relatively young age mean that you have a greater risk in an IUL purchase?
Those who are younger tend to have a more volatile earning profile. This may mean that you are at a higher risk of having a disruption in your income that could force you to stop making the desired IUL contributions. Be very wary about whether or not you will be able to maintain future IUL contributions, because most policies can lapse if you fully discontinue contributions too early. Should your policy fail, any distributions you may have taken can become taxable, and if you are still in the accumulation phase, then any funds you have committed to the product could be negatively impacted. See indexed universal life insurance pros and cons for more information.