Life insurance is one of the most important purchases that you’ll ever make for your loved ones. It’s one of the only ways that you can ensure that your family will have the money that they need, even if something tragic were to happen to you. There are a lot of people that want to use their life insurance as more than a safety net. These people want to use their life insurance as an investment to help supplement their income.
It is just expected that as we grow older, we begin to put more thought and consideration into the decisions we make. This is especially true concerning our future and our finances. By the time we reach our mid 40’s, impulse should no longer be a factor in the way we invest our money. I am going to show you exactly how investing in an Indexed universal life at age 44 can play a huge role in your retirement, providing you with tax-free income.
This article is going to look the different advantages of an indexed universal life insurance policy and the ways that you can get the best plan for your family.
Indexed universal life at age 44 is still a great deal
Indexed universal life is a financial tool that can build up significant cash value that can be used to supply a tax-free income stream to help fund retirement. The key to maximizing the cash value is to purchase a very small amount of life insurance while paying the maximum premium that IRS guideline 7702 will allow.
Your premium is flexible in an indexed UL policy so if you need to stop or reduce premiums as you go along you can.
You will actually be receiving both life insurance and investment components through these permanent life insurance policies. These policies contain a cash account that the premiums will be deposited. The account will enjoy the upside potential of the stock markets without the downside risk of loss.
You, the policy owner makes the decisions as to which stock market indexes your funds will be allocated to. The more popular index choices are NASDAQ, the S&P 500, or DOW JONES. Because the fact that you can’t lose any of your investment through a market’s negative return, your worst scenario is a 0 percent return for a bad year. On the other hand, the current cap that your interest is able to reach is capped. These caps are currently between 12-14 percent depending on the insurance company.
Because of the fact that this is a life insurance policy, your cash value will be reduced by the amount of policy charges. Because you are buying a small amount of life insurance, these charges are kept at a minimum.
What can you expect?
On an average, indexed universal life insurance policies have grown more than 7 percent per year.
So lets assume we average just 7%:
At 44 years old, a male investing $5,000 a year through an indexed UL until the age of 65 would have a policy cash value of around $210,000. This would provide him the option of receiving a tax-free income of over $18,000 each year all the way to age 100. The original amount of life insurance was around $100,000, this keeps the cost of the policy at a minimum and allows the cash value to increase in the policy.
A 44-year-old female opening an indexed UL policy with the same $5000 annual premium would build cash value of over $205,000. After age 65, she would be able to receive an annual tax-free income of over $16,500. We only had to buy $about $140,000 of life insurance in order to get these policy benefits.
As previously stated, indexed UL policies do have charges. There is an annual policy fee which normally ranges from $80-$100. The unit expense charge varies based on age, gender, and underwriting class. These typically go away after the first ten years. Not every policy is charged with a premium load, but for those which do, these also usually go away after ten years. It is important to remember than an indexed UL policy is not only life insurance, these policies can be viewed as an investment in your future which bring peace of mind and financial freedom in retirement.
We know that shopping for life insurance is not a fun experience. There are several different types of plans that you’ll need to compare. Not only that, but there are hundreds of companies that you’ll need to pick between when you’re shopping for coverage. It can be a long and complicated process, but that’s why we are here to help. It’s our mission to ensure that you’re getting the best rates possible.
Ever insurance company is different, and all of them have different rates, medical underwriting, and benefits that they are going to offer you. Instead of wasting your time to research those companies or call the agents, let us do all of that dirty work for you.
Unlike a traditional insurance agency, we are a group of independent insurance agents, which means that we work with dozens and dozens of highly rated companies across the nation, and we know which companies offer the best indexed universal life insurance plans on the market.
If you have any questions about indexed UL, please contact one of our agents today. We would love to answer those questions and help you find the best plan possible. We can answer any questions that you have and connect you with the best plan possible. You never know what’s going to happen tomorrow, which means that you shouldn’t wait another day to get the perfect life insurance plan possible.
Our agents have years of experience working with all types of clients across the country and we know which companies are going to give you the best rates. Even if you have a pre-existing condition, don’t assume that you can’t get the life insurance protection that you want and your family deserves.
If you would like to know more about what an indexed universal life insurance policy can do, we can design a plan for you.
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