Lifelong protection for your family

IUL is designed to provide life insurance coverage you’ll never outlive. As long as certain premium and cash value requirements are met, your loved ones are guaranteed to receive a tax-free death benefit.

Financial support if major illness strikes

If you’re diagnosed with a qualifying critical, chronic, or terminal illness, you can access a portion of your death benefit early for medical expenses, your bucket list, or any other purpose.

Liquidity during your working years

Access your policy’s available cash value any time via tax-free policy loans and withdrawals. Loans and withdrawals affect long-term policy performance.

Retirement income options

Activate the Lifetime Income option for a monthly income that lasts as long as you live. Or tap your policy’s cash value for supplemental retirement income as needed.

How IUL Contributes to Generational Wealth:

• Tax-Deferred Growth:
  • The cash value in an IUL grows tax-deferred. This means you don’t pay taxes on the earnings until you withdraw them, allowing the money to grow faster.
• Protection and Flexibility:
  • The policy offers life insurance coverage for your entire life, unlike term insurance which expires. It’s a permanent solution that can pass wealth down to your heirs.
  • The flexibility of the IUL allows policyholders to adjust their premiums and death benefit, making it adaptable to changing financial needs.
• Legacy and Wealth Transfer:
  • The death benefit can be passed to beneficiaries tax-free. This can be used to provide financial security, cover estate taxes, or fund future generations.
  • The growth of the cash value within the policy can also be used as a resource, through loans or withdrawals, to help future generations with things like education, home purchases, or business ventures.
• Cash Value as an Asset:
  • The cash value within an IUL can be accessed during your lifetime. While it’s meant primarily to provide a death benefit, you can borrow against or withdraw from this value. This can be done with favorable loan terms, allowing you to use the money for investment opportunities or to support family needs, preserving other assets.
• Long-Term Strategy:
  • IULs are often used as a long-term wealth-building tool. The idea is to start early, allowing the cash value to grow over several decades, providing substantial funds for future generations.
• Legacy Planning & Estate Tax Benefits:
  • IUL policies can play an integral role in estate planning, potentially reducing estate taxes. Since the death benefit is paid out tax-free, it can help offset the estate tax burden that your heirs might face.
• Generational Wealth Accumulation:
  • With a well-funded IUL, you could have a multi-generational strategy in place where wealth accumulates over time, allowing you to leave a lasting legacy, not only through the death benefit but also by providing financial support for your descendants.

How IUL Insurance Can Be Used for Retirement:

• Tax-Deferred Growth:
  • One of the biggest advantages of an IUL policy is that the cash value grows tax-deferred. This means you don’t pay taxes on the interest or growth of the policy’s cash value until you withdraw or borrow from it.
  • This allows the policy to build wealth over time, without the drag of annual taxes.
• Retirement Income:
  • As you near retirement, you can borrow against or withdraw from the cash value of your IUL policy to create a tax-free retirement income. Loans taken against the policy are generally not taxed, making them a potential source of tax-free income.
  • You can use this money to supplement other retirement savings (like 401(k)s, IRAs, etc.) and help meet your retirement income needs.
  • Since the policy is designed for long-term growth, you can potentially use the funds in your IUL as a complementary source of income, especially if you have other assets or accounts that are subject to taxes.
• Flexibility in Withdrawals and Loans:
  • Unlike traditional retirement accounts (such as IRAs or 401(k)s), IULs offer flexibility in how you access your funds. You can choose to borrow against your policy’s cash value or take a partial withdrawal, depending on your financial needs.
  • Loans against your IUL are not considered taxable income, as long as the policy remains in force. However, withdrawals may reduce the death benefit and cash value, so it’s important to manage these withdrawals carefully.
• Death Benefit:
  • While your main goal may be to use the cash value for retirement, the death benefit of the IUL will remain in place and can be passed on to your beneficiaries tax-free. This means that in addition to funding your own retirement, you’re creating a legacy for your heirs.
  • This makes IUL an attractive option for those who want to leave a legacy while also securing their retirement income.
• Protection from Market Downturns:
  • IULs are tied to a stock market index (such as the S&P 500), but they typically come with a floor (usually 0%), meaning if the market performs poorly in a given year, your cash value won’t lose money.
  • This provides a measure of safety compared to directly investing in stocks, since your cash value is protected from market downturns while still having the opportunity to grow when the market performs well.
  • This aspect of protection can be particularly appealing as you approach retirement and want to preserve your wealth while still participating in market growth.
• No Required Minimum Distributions (RMDs):
  • With traditional retirement accounts (such as IRAs or 401(k)s), you are required to take minimum distributions starting at age 73 (as of current laws). These distributions are taxable and can increase your tax burden in retirement.
  • IULs do not have RMDs, so you’re not forced to take withdrawals, giving you more control over your retirement income and tax planning.

Tax-advantaged accumulation

Increase cash value through fixed account growth or through index options that credit you based on the performance of popular market indexes, up to a maximum. Growth is generally tax-free.

Zero downside risk

If an index is down, the index option to which it’s tracked will never go below 0%—meaning you’ll avoid all market-based losses.

UL _ Index universal Life – Indexed Universal Life Insurance
Indexed Universal Life (IUL) is a unique form of permanent life insurance that combines the protection of a life insurance policy with the potential for cash value growth linked to the performance of stock market indices, such as the S&P 500®. Unlike traditional universal life insurance policies, IUL offers policyholders the opportunity to participate in market gains without exposing them to market losses. This means that while your cash value has the potential to grow based on market performance, it is also protected from downturns. Additionally, IUL policies provide flexibility in premium payments and death benefits, allowing policyholders to adjust their coverage according to their changing financial needs.

An Indexed Universal Life (IUL) Insurance policy is a type of permanent life insurance that combines the flexibility of universal life insurance with the potential for higher growth linked to a stock market index (such as the S&P 500). It’s designed to provide lifetime insurance coverage while offering the opportunity for cash value growth based on the performance of a specific market index. Here’s a breakdown of how an IUL works and what it entails:

Key Features of an IUL (Indexed Universal Life) Insurance Policy:

 Life Insurance Coverage:

• An IUL policy provides permanent life insurance coverage, which means it stays in force for your entire life as long as premiums are paid.
• The policy includes a death benefit, which is paid to your beneficiaries when you pass away. The amount of the death benefit can be adjustable, meaning you may have the ability to increase or decrease the coverage as your financial situation changes.

Cash Value Component:

• One of the defining features of IUL insurance is the cash value that accumulates over time. A portion of the premium payments goes toward building this cash value.
• The cash value grows based on the performance of a stock market index (such as the S&P 500), but with some protections in place.
• There is usually a cap (maximum return) and a floor (minimum return), meaning if the market performs poorly, your cash value will not decrease (typically set to 0%), but if the market performs well, your returns are capped at a certain level.

Market-Linked Growth:

• Unlike whole life insurance, which has a fixed interest rate for cash value growth, an IUL’s cash value growth is tied to the performance of a stock market index. This gives the potential for higher returns compared to more traditional permanent life policies.
• The index is often not directly invested in stocks, but the policy’s cash value is credited with an interest rate linked to the performance of the index.
• This structure allows for greater upside potential while protecting you from market downturns.

Flexible Premiums:

• IULs offer premium flexibility. You can adjust the amount and frequency of your premium payments based on your financial situation.
• If you have more funds available, you can pay higher premiums to build more cash value. Conversely, if you need to reduce premiums or temporarily stop paying, you may be able to do so without losing the policy’s coverage (as long as there’s enough cash value to cover the cost of insurance).

Flexible Death Benefit Options:

• IUL policies often offer two types of death benefits:
  1. Level Death Benefit: The death benefit remains the same throughout the life of the policy.
  2. Increasing Death Benefit: The death benefit increases to include both the initial coverage and any accumulated cash value, potentially providing more coverage as the policy grows.
• You can choose which death benefit option aligns with your goals.

Loans and Withdrawals:

• You can borrow against the cash value of your IUL policy or make withdrawals from the policy. Loans are generally not taxable as long as the policy remains in force.
• Keep in mind that if you take out a loan, interest is charged, and any unpaid loan balance will be deducted from the death benefit when you pass away.
• Withdrawals reduce the cash value and potentially the death benefit.

No Market Risk:

• One of the most attractive features of an IUL policy is that the cash value is not directly invested in the stock market. While it is linked to a market index, the insurance company guarantees that your cash value will not decrease in value due to market losses.
• This means if the index has a negative return, your cash value won’t lose money, which can provide peace of mind in volatile market conditions.

Growth Caps and Participation Rates:

• Caps: The insurance company will typically set a cap on the amount of growth your cash value can achieve, even if the market performs exceedingly well. For example, if the cap is set at 12%, and the market performs at 20%, your cash value would only receive 12% growth for that year.
• Participation Rate: This determines how much of the index’s return will be credited to your policy’s cash value. For example, if the participation rate is 80%, and the index increases by 10%, your cash value would be credited with an 8% return.

Cost of Insurance:

• As you age, the cost of insurance (COI) within the IUL typically increases. This means that while you have flexibility in premium payments, the amount you pay may increase as you grow older to keep the policy in force.
• The cost of insurance is typically deducted from the policy’s cash value, and if the value gets too low, the policy may lapse, so it’s important to monitor and manage the policy’s performance.

How the “Become Your Own Bank” Concept Works with IUL Insurance:

• Building Cash Value:
  • An IUL policy has a cash value component that grows over time based on the performance of a market index (like the S&P 500). A portion of your premium payments goes into the cash value, which earns interest on a tax-deferred basis.
  • Over time, this cash value can accumulate to a significant amount, and once it has built up, it can be used in various ways to finance personal needs.
• Borrowing Against Your Cash Value:
  • One of the main features of IUL insurance is that you can borrow against the cash value. This means that, instead of borrowing money from a traditional bank or financial institution, you can access funds directly from your policy.
  • These loans typically come with low interest rates (set by the insurance company) and are relatively easy to access. Since the loan is against your own policy’s cash value, there’s no strict credit check or lengthy approval process.
• How Loans Work:
  • When you take a loan from your IUL policy, you are borrowing against the cash value. Technically, it’s not a withdrawal; you’re using the policy’s value as collateral.
  • Loans taken from your IUL policy are tax-free, as long as the policy remains in force and doesn’t lapse (which can happen if the policy’s cash value runs out).
  • The loan will accrue interest, and you will need to repay the loan to keep the policy intact. However, if you don’t repay it, the outstanding loan amount will be deducted from the death benefit when you pass away.
• Flexibility:
  • One of the appealing aspects of borrowing from an IUL is its flexibility. There are usually no fixed repayment terms, so you can repay the loan as you choose. This gives you a degree of control over your finances that isn’t typically available with traditional bank loans.
• Advantages of Becoming Your Own Bank with IUL:
  • Control: You have control over how and when you borrow from your policy. There’s no third party involved, no bank to deal with, and no approval process.
  • No Impact on Credit: Since you’re borrowing from your own policy, there’s no impact on your credit score, unlike with traditional loans.
  • Tax Advantages: The money you borrow is tax-free as long as the policy is in force, which can provide significant tax advantages over time.
  • Potential for Growth: As long as your loan balance remains manageable and your policy is active, the cash value continues to grow, allowing you to build wealth while accessing funds.
  • Collateral Flexibility: If you need funds for various personal uses (home improvement, paying for a car, education, or even business expenses), you can use the loan proceeds with fewer restrictions compared to traditional loans.
• Example of Becoming Your Own Bank with IUL:
  • Let’s say you’ve built up $100,000 in cash value in your IUL policy. You decide you need $50,000 to pay for a child’s education. Instead of applying for a bank loan, you take a loan from your IUL policy.
  • The loan is taken against the cash value, and you pay back the loan over time (or not, depending on your situation). While the loan is outstanding, the remaining cash value still grows based on the index, potentially increasing your wealth.
  • When you pass away, the loan balance (plus interest) is deducted from the death benefit. But since the loan was tax-free, you’ve used it efficiently to manage your financial needs without involving banks or increasing your taxable income.