Tax Free Retirement Using IUL

Index Universal Life Insurance for High Net-worth Individuals and Wealth Managers

TAX Free Advantages

Tax-Free Retirement Compared to Traditional Retirement Plans: When compared to traditional retirement savings options, IUL holds its unique advantages. Traditional retirement plans often have contribution limits, early withdrawal penalties, and mandatory distribution rules. In contrast, IUL policies can offer greater flexibility and control, with no contribution limits, no early withdrawal penalties, and no required minimum distributions.

An IUL policy becomes a powerful instrument in your tax-free retirement strategy, offering both growth potential and financial flexibility unmatched by many traditional retirement plans.

What is Tax-Free Retirement?

• Tax-Free Retirement Planning is a strategy: IUL is a unique form of life insurance that not only offers a death benefit but also serves as a tool for tax-advantaged retirement planning.
• Growth Linked to Market Indexes: The cash value in an IUL policy can increase based on the performance of selected stock market indexes, offering cash value growth to be used for tax-free retirement.
• Tax-Free Death Benefit for Beneficiaries: When you die, IUL pays your family a lump sum that is generally tax-free, ensuring financial security.
• Living Benefits for Critical Illnesses: IUL policies can include features that allow you to access funds in case of critical health issues, such as a heart attack, stroke, or cancer, providing financial relief when you need it most.
• Support for Long-Term Care Expenses: IUL can also be a financial resource for covering long-term care expenses, offering peace of mind and financial support in later stages of life.

Famous People who have Used the Cash Value in their Life Insurance

J.C. Penney

Mr. Penney used the cash value as an emergency fund in the 1930s.

His company was doing great in the 1920s giving him great cash flow. With this cash flow, he bought real estate, stocks, and whole life insurance.

The market crashed in 1929 which led to the Great Depression. Penney borrowed against his cash value in order to make payroll and purchase inventory, which ultimately helped his business get through the Great Depression.

Walt Disney

When Walt Disney presented his idea of a theme park called Disneyland to bankers, they could not see his vision being successful and would not loan him money. So instead of using traditional banks, Disney sold one of his houses and borrowed against the cash value of his whole life insurance to start Disneyland on his own.

He ended up creating one of the most successful brands in America that produce over $70 million in revenue a year.

Ray Kroc

In the early 1960s, Ray Kroc was working hard to expand his McDonald’s brand. Cash flow was tight and he was putting every dollar that he could back into the business. During these times of tight cash flow, Kroc borrowed against his whole life insurance cash values to pay key employees and fund marketing campaigns.

Today, there are more than 37,800 McDonald’s restaurants worldwide, producing more than $21 billion of revenue a year (talk about the external rate of return on a policy).

What can an IUL do for you

• It provides safety, liquidity, guarantees, and control to those who own it
• You can access the cash value for anything you choose to
• There is no need to qualify for the loan and you have no restrictions for use
• Accumulating capital is a must to survive.

• • You never know when your business or investment will fall on hard times, but being capitalized inside of a IUL policy can give you the capital needed to work through the difficult times.  You can eliminate the third parties breathing down your neck for payments!
  • What the policy returns you on your cash value is not the only point in the IUL. Having total control of the banking function and opportunities that you’re presented with is.
    • You and I and the life insurance companies can’t control the interest rate environment. When you have an opportunity to start a business or take on an investment opportunity though, having access to capital is critical.
  • Life insurance can be used very creatively in business planning.
    • Life insurance can be used to attract and provide compensation to key employees, and give liquidity/protection when it’s most needed (the passing of a key employee or owner). With proper planning and design, this not only protects the business but the family as well.

Contact us today to see if we are a good fit to help you work toward your financial goals!

Indexed Universal Life Insurance, or IUL, is a type of universal life insurance. Instead of earning interest at a fixed rate, the cash value portion is tied to the performance of a market index, like the S&P 500.

Unlike investing directly in an index fund, however, you won’t lose money when the market has a downturn. This is because a guarantee applies to your principal, insuring it against losses. On the other hand, there’s usually a cap on the maximum return you can earn. Many times, you’ll also be able to divide your assets between fixed and indexed portions of your policy.

One of the most attractive features of an IUL is the ability to take advantage of stock market returns without the risk of loss. And it does so while building up a death benefit that your beneficiaries will receive tax-free.

Other benefits of indexed universal life insurance include:

• Unlimited contributions: Traditional retirement avenues have contribution limits, but IULs don’t.
• Tax-free growth and distributions: “IUL distributions are tax-free versus tax-deferred in the other vehicles. That means you don’t have to pay taxes on the money you eventually draw from the cash value of the IUL. It’s similar to a Roth IRA in this respect.
• Use at any time: With regular retirement programs, you typically have to wait until you reach age 59 ½ before you can start taking money out penalty-free. With an IUL, there is no age requirement.
• Death benefit: A tax-free death benefit is distributed to your beneficiaries, which means it won’t face income or death taxes.
• Loan availability: Depending on your policy and available cash, you can borrow money from your IUL without facing penalties, taxes or a credit check. You also do not have to pay back the money you take out.