Life Insurance:
What is an IUL
Life Insurance
What is an IUL?
Most people are aware of life insurance’s primary function. In short, life insurance allows you to leave money for your beneficiaries after your death. But, what if we told you that the right type of life insurance can provide you with income while you are still alive? In particular, indexed universal life (IUL) insurance could be utilized for this purpose. What is an IUL? Could it be right for you? Reach out to us to learn more.
How Does An IUL Work?
An insurance company issues you a life insurance policy in exchange for the premium you pay. An IUL policy is often “max-funded,” which means the entire premium is paid in advance. Then, the insurance provider agrees to protect your money. The policy is linked to an index, which allows it to accrue interest at a reasonable rate over time. However, the money is not invested in the market. You see, this is an important distinction, because with an IUL, whatever happens in the market, your money will not be affected. This may give you more confidence and stability during retirement, if it has a place in your retirement strategy.
Borrowing against your cash value (the money in the IUL) can provide you with tax-free* income. So, if you have money in retirement plan accounts that you don’t want to withdraw yet, purchasing an IUL and withdrawing funds from it instead may be a useful alternative for you. Reach out to us to learn more.
IUL Benefits
An IUL can offer a number of benefits if you choose to use it for retirement. These include:
- Protection for your cash value
- Potential for indexed interest
- The possibility of “locking in” potential gains
- No penalties for early withdrawal
