1. “IUL gives you stock market returns”

An IUL is not invested directly in the market. The cash value is credited interest based on an index, such as the S&P 500, but limited by a cap and a participation rate. For example, a 70% participation rate on a 10% index gain credits 7%, and a 9% cap limits the credit to 9% even if the index rises 15% (source). Caps and participation rates are usually not guaranteed and can be lowered. Dividends on the index are generally not included.

2. “You can never lose money in an IUL”

The floor, usually 0%, means a down year doesn’t produce a negative credit. But the policy still has monthly cost of insurance and expense charges, and they are deducted even in a 0% year. If a policy is underfunded and has several flat years, the cash value can drain and the policy can lapse. A no-lapse guarantee rider may help, if the required premium is paid. Funding an IUL properly and reviewing it every year matters.

3. “Term is a waste because you get nothing back”

Term is designed to give the most protection for the lowest cost during the years your family needs it most. Not “getting money back” is the trade-off for a much lower premium. Many term policies also let you convert to permanent coverage later without a new medical exam. Read 3 Things People Don’t Know About Term Life Insurance.

4. “It has to be one or the other”

Many families use both. They use term to cover large needs for a set period, like a mortgage and raising kids, and a smaller IUL for lifelong coverage and cash value. The right mix depends on your budget, your goals, and how long you need coverage. The best choice is the one you can afford to keep in force.

Quick comparison

• Term: lowest cost, fixed period, no cash value, often convertible.
• IUL: lifelong coverage if properly funded, cash value with a 0% floor and capped upside, ongoing charges, more moving parts.

With either one, ask for an illustration that shows what happens under both the current assumptions and the guaranteed assumptions.

Related: 5 Things People Get Wrong About Life Insurance.

Frequently Asked Questions

Is IUL better than term life insurance?

Neither is better for everyone. Term provides the most coverage for the lowest cost for a set period. IUL is permanent coverage with cash value, but it costs more and has caps, charges, and lapse risk if underfunded.

Can you lose money in an IUL?

Index credits generally can’t be negative because of the floor, but policy charges continue, so cash value can decline and an underfunded policy can lapse.

What is a cap rate in IUL?

The cap is the maximum interest the policy can be credited in a period. For example, with a 9% cap, the credit is limited to 9% even if the index rises more.

Can I convert term life insurance to IUL?

Many term policies allow conversion to a permanent policy offered by the same insurer within a set time, without a new medical exam. Options depend on the contract.

Last updated October 2026. This article is general education, not tax, legal, or investment advice. Brent Hernandez, California Life Insurance License #0M15424. Insurance products are offered through Hegemon Insurance Solutions (California License #0I0198). Features, costs, and guarantees vary by carrier and policy, and guarantees depend on the claims-paying ability of the issuing insurer. Wet Ink Notary LLC is not a law firm and does not give legal or tax advice.

The post 4 Things People Get Wrong About IUL vs. Term Life Insurance appeared first on Mobile Notary Public and Process Server - Southern California.

1. “I think it costs too much”

Cost is the number one reason. In the 2025 Barometer, 48% of Millennials and 39% of Gen Z adults said perceived cost kept them from buying. But young adults guessed the price of a $250,000, 20-year term policy at about 10 to 12 times what it actually costs. Why you should get it anyway: a quote takes a few minutes, and the price is usually locked for the term you choose.

2. “I don’t know how much I need or what kind to buy”

About one third of Millennials and Gen Z adults said they were unsure how much coverage they need or what type to buy. Why you should get it anyway: you don’t need to figure it out alone. A simple needs review adds up your income, mortgage, debts, and future costs like college, then subtracts savings and existing coverage. Term is often the starting point. Read 3 Things People Don’t Know About Term Life Insurance.

3. “I’m covered at work”

55% of working adults have life insurance through their employer, according to the 2025 Barometer. But that coverage is usually one to three times your salary, and it usually ends when you leave the job, as Life Happens explains. Why you should get it anyway: a personal policy stays with you no matter where you work, and it can fill the gap between your work coverage and what your family would really need.

The real cost of waiting

Every year you wait, you get older, and your health may change. Both can raise your price or make coverage harder to get. Locking in coverage while you are healthy is one of the simplest ways to protect your family.

Also read: 5 Things People Get Wrong About Life Insurance.

Frequently Asked Questions

Why do people not buy life insurance?

The most common reasons are perceived cost, uncertainty about how much or what type to buy, and relying on employer coverage, according to the 2025 Insurance Barometer Study.

How many Americans need more life insurance?

The 2025 Barometer found 40% of consumers, about 100 million Americans, say they need life insurance or need more.

Is life insurance through work enough?

Often not. It is usually one to three times salary and generally ends when you leave the job.

Last updated October 2026. This article is general education, not tax, legal, or investment advice. Brent Hernandez, California Life Insurance License #0M15424. Insurance products are offered through Hegemon Insurance Solutions (California License #0I0198). Features, costs, and guarantees vary by carrier and policy, and guarantees depend on the claims-paying ability of the issuing insurer. Wet Ink Notary LLC is not a law firm and does not give legal or tax advice.

The post 3 Reasons People Don’t Get Life Insurance (and Why They Should) appeared first on Mobile Notary Public and Process Server - Southern California.

1. “It’s too expensive”

Young adults overestimate the cost of a basic term policy by about 10 to 12 times, according to the 2025 Barometer. For many healthy adults, a basic term policy costs much less than they expect. The only way to know your price is to get a quote.

2. “I have coverage at work, so I’m covered”

Group coverage is a great benefit, but it is usually only one to three times your salary, and it typically ends when you leave the job, according to Life Happens. Employers are also not required to offer it. A policy you own stays with you.

3. “Only the breadwinner needs it”

A stay-at-home parent provides childcare, transportation, cooking, and household management. Replacing that work costs real money. Both parents should consider coverage.

4. “I’m young and healthy, so I don’t need it yet”

Being young and healthy is exactly when coverage is cheapest and easiest to qualify for. Your health can change, and once it does, coverage may cost more or be harder to get.

5. “Once I buy it, I’m done”

Life insurance passes to the beneficiary named on the policy, not to whoever is named in your will, as the California Attorney General explains. After a marriage, divorce, new baby, or death in the family, an outdated beneficiary can send money to the wrong person. Review your beneficiaries every few years and after big life events.

Bonus: policies get lost

Families sometimes don’t know a loved one had a policy. If you think a deceased family member had life insurance or an annuity, you can submit a free search request through the NAIC Life Insurance Policy Locator.

Related reading: 3 Things People Don’t Know About Term Life Insurance and 3 Reasons People Don’t Get Life Insurance (and Why They Should).

Frequently Asked Questions

What percentage of Americans have life insurance?

According to the 2025 Insurance Barometer Study from LIMRA and Life Happens, 51% of Americans ages 18 to 75 own life insurance.

Does my will control who gets my life insurance?

Usually not. Life insurance generally pays the beneficiary named on the policy, which is why beneficiary designations should match your estate plan.

Should a stay-at-home parent have life insurance?

Many families decide yes, because replacing childcare and household work would cost money if that parent passed away.

How do I find out if a deceased relative had life insurance?

You can submit a free request through the NAIC Life Insurance Policy Locator, and participating insurers will check their records.

Last updated October 2026. This article is general education, not tax, legal, or investment advice. Brent Hernandez, California Life Insurance License #0M15424. Insurance products are offered through Hegemon Insurance Solutions (California License #0I0198). Features, costs, and guarantees vary by carrier and policy, and guarantees depend on the claims-paying ability of the issuing insurer. Wet Ink Notary LLC is not a law firm and does not give legal or tax advice.

The post 5 Things People Get Wrong About Life Insurance appeared first on Mobile Notary Public and Process Server - Southern California.

1. It probably costs far less than you think

In the 2025 Insurance Barometer Study from LIMRA and Life Happens, healthy adults ages 18 to 30 guessed that a $250,000, 20-year term policy costs about 10 to 12 times more than it really does. Cost is also the top reason people give for not buying: 48% of Millennials and 39% of Gen Z adults named it. With term, the rate is usually locked for the whole term, so the price you get while you are young and healthy is the price you keep.

2. Many term policies can be converted later without a new medical exam

Most people think of term as “rented” coverage that simply ends. But many term policies include a conversion privilege. It lets you convert some or all of the coverage to a permanent policy before a deadline, without proving your health again. That matters if your health changes. The window and the policies you can convert to depend on the carrier, so check the contract or ask me to review it.

3. Some term policies include living benefits

Many carriers offer accelerated death benefit riders, sometimes called living benefits. If you are diagnosed with a qualifying terminal, chronic, or critical illness, you may be able to use part of the death benefit while you are still alive. Rules, costs, and qualifying conditions vary by carrier and by state, so this is something to compare before you buy.

Why term life insurance makes sense for most families

• Your work coverage is probably not enough. Group life insurance is usually one to three times your salary, and it usually ends when you leave the job, according to Life Happens.
• It covers your highest-need years. A term can match the years you have a mortgage, young children, or other debts.
• It keeps your family in their home. The death benefit can pay off the mortgage, replace your income, and cover childcare or college.
• Almost 100 million Americans are underinsured. The 2025 Barometer found 40% of consumers say they need life insurance or need more of it.

California consumer protections to know

California gives you a “free look” period after your policy is delivered. During it, you can review the policy and cancel for a refund. The period is at least 10 days, and buyers age 60 and older get 30 days. You can also look up an agent’s license and learn about life insurance on the California Department of Insurance website.

If you are also thinking about your will, trust, or beneficiary designations, read 5 Reasons to Get a Will and Trust in California and 5 Things People Get Wrong About Life Insurance.

Frequently Asked Questions

Is term life insurance a waste if I outlive it?

Term is designed to protect your family during the years they would be hurt most by losing your income. If you outlive it, your family was protected the whole time at a low cost. Some policies also let you convert to permanent coverage before the term ends.

How much term life insurance do I need?

It depends on your income, debts, mortgage, children, and savings. Many families start by adding up the mortgage balance, years of income to replace, and future costs like college, then subtracting existing coverage.

Can I cancel a new life insurance policy in California?

Yes. California law gives a free look period of at least 10 days after delivery, and 30 days for buyers age 60 and older, to cancel for a refund.

Does my life insurance at work follow me if I leave?

Usually not. Group life insurance generally ends when you leave the employer, and it is often only one to three times your salary.

Last updated October 2026. This article is general education, not tax, legal, or investment advice. Brent Hernandez, California Life Insurance License #0M15424. Insurance products are offered through Hegemon Insurance Solutions (California License #0I0198). Features, costs, and guarantees vary by carrier and policy, and guarantees depend on the claims-paying ability of the issuing insurer. Wet Ink Notary LLC is not a law firm and does not give legal or tax advice.

The post 3 Things People Don’t Know About Term Life Insurance (and Why California Families Should Get It) appeared first on Mobile Notary Public and Process Server - Southern California.