Top Five Reasons to Consider an Indexed Universal Life (IUL) Policy

An Indexed Universal Life (IUL) policy is a unique solution for many clients that is often misunderstood.

To help with understanding an IUL, we wanted to post what we believe are the top 5 fundamental features that set IUL’s apart from the rest of the vehicles available, and why you should consider this product if .  Here is our list:

1. Tax deferred accumulationTypically, the premiums paid into an IUL are Non-Qualified (after-tax) dollars and the portion of the premiums that go toward accumulation in an IUL grow on a tax deferred basis. This means you will NOT be receiving a 1099 for the growth on his/her policy every year!

2. Income tax free death proceedsOne of the most important reasons for purchasing any life insurance policy is to pass along an income tax free death benefit to your beneficiary. When the policy owner passes away, the lump sum death benefit will pass to his/her beneficiary income tax free.

3. Income tax free distributions
When structured properly, life insurance has the capability of producing non-reportable, tax free income to the client during their lifetime, which can be used for retirement income OR, funding a college education. This is accomplished by taking loans against the policy; as loans (as defined by
section 7702 and 72e of the tax code) are not subject to income taxation.

Additionally, that income is not reported or counted as income for the purposes of Social Security benefits taxation. In other words, income from your life insurance policy won’t increase the chances of your Social Security benefits being taxable.

4. Safety and security
Cash value growth inside of an IUL is pegged to market indexes (but never directly invested in the market), therefore you have a vehicle that offers you upside potential with no risk of principal loss due to market forces. How the policy credits its interest rates varies from insurance carrier to carrier and product to product, but they all have some form of a "floor and a ceiling" in between which your rates of return will fall. If chosen properly, most IUL's provide a floor that provides a protection against loss of principal.

5. Liquidity
In an IUL, your money is always working for you. And because of that, you always have a very high level of access to that money. Most of the time you have access to nearly all of your cash value in the
policy and only need to leave enough cash value in the policy to cover roughly months of charges. This high level of liquidity allows you to control your money.

Summary:
There are no other vehicles available in the marketplace today that offer all 5 of these features. It is for these reasons (and others) that the Indexed Universal Life marketplace has exploded in recent years, growing as much as 30% per year.

Want to learn if this powerful financial product is right for you?  Contact us today by visiting our website at:  www.moreyinsurancegroup.com, or click here to Contact Us