There are several different kinds of life insurance plans on the market. Each type has its own advantages and disadvantages that you should take note of when you’re shopping for coverage.
Although only in the marketplace for about twenty years, new policy sales of Indexed Universal Life (IUL) insurance has grown to over $1.5 billion as of the end of 2014. Needless to say, the product does have its fans in the world of financial planning and retirement. The perks this product brings to the table are just too good to overlook. Yes, there are many reasons to use IUL in retirement planning, but, as with any insurance product, there are plenty of naysayers out there that claim otherwise.
IUL insurance policies can be an excellent option for life insurance coverage, but they can also be confusing. It’s important to understand all of your options when deciding which policy to purchase. This article is going to explore the different advantages of IUL and reasons that you should consider purchasing one of these plans.
Let’s Look at Six Reasons to Use IUL in Retirement Planning
The Safety Factor
Investors who have been seriously burned by declining returns in the bond, equity, and real estate markets certainly understand the value of a guarantee that their annual returns will never be a negative number. That coveted guarantee is exactly what IUL is famous for. Because of the annual reset provided in the contract, current values cannot be negatively impacted by a down market.
Tax-Free Cash Flow
While other well-known and popular investment vehicles may create a tax burden for the investor, the IUL eliminates the drawback since cash flow can be created by accessing accumulated funds through contract loans that are immune from federal, state, and local income taxes. These cash producing loans are also free of the alternative minimum tax that can be levied against most other investment products. When you consider the earnings in your account along with the tax-savings benefits, the IUL just keeps looking better and better. For an accurate and personalized quote along with some expert advice, go ahead and take a minute to complete the quote form on the left side of the page.
Higher Positive Returns
As the market has suffered over the last decade with lower than expected return on investment, traditional investment products have become somewhat unattractive to savers. With the IUL, if the selected index performs well over the measured period, your contract can experience an interest earning that is considered very attractive. In fact, some IUL products include interest crediting formulas that will compare multiple indices and then more heavily weight the better performers.
The Available Death Benefit
Although death statistics can be very disappointing, it’s important to take into consideration the financial devastation that can result from the unexpected death of a wage earner. Reports provided by the Life and Health Insurance Foundation for Education indicate that a man at 35 years old has more than a one-in-six chance of dying before retirement, and a man at 45 years old has more than a one-in-seven chance of dying before age 65. Fortunately, your IUL policy provides a tax-free death benefit that mitigates this risk by providing the funds needed for your family and surviving loved ones to continue with their lives without excessive worries about finances.
Coverage for Life without Paying for Life
An unexpected bonus that comes with your IUL policy is that once you stop paying periodic premiums and begin taking cash through policy loans, your insurance coverage doesn’t end.
In fact, many policyholders continue to be covered for the rest of their lives without having to keep paying additional money into the contract. You can learn more about these unique features of the IUL by calling Ogletree Financial Services at (800) 712-8519 or just request a quote to the left of this page.
Return of Premium
Ogletree Financial, along with the help of some sophisticated software, can design a legitimate scenario for you where you can be assured that at a future point in time, you can cancel your policy and have the insurer pay you, at least, the amount that you have paid in over time. Although this is not the same concept that some Term policies offer, the final accounting is basically the same. You pay in a designated periodic premium for a predetermined amount of time and then cancel the policy and receive enough money from the cash account that it is equal to your premiums paid in. The return of premium is just another level of safety for you, the consumer.
IUL insurance policies are not perfect for every consumer. In fact, that word “Perfect”, should probably not be attached to any investment product until the end of the investment period when the investment performance can be legitimately rated. The IUL product is, however, one of the best methods for supplementing a retirement plan and providing life insurance coverage at the same time.
If you’re looking to get simple and cheap life insurance, then an IUL plan is not going to be the best option for you. There are several more affordable plans that you can choose from, but if you want to get a policy that is going to give you additional financial advantages, then an IUL can be a great option.
How Much Life Insurance Do You Need?
Regardless of which type of policy that you buy, it’s vital that you purchase enough protection for your family. Not having enough life insurance is one of the worst mistakes that you can make for your loved ones. There are several different factors that you’ll need to account for before you buy insurance coverage.
The first number that you should crunch is your debts and other final expenses that your family would be responsible for if you were to pass away. The primary goal of your life insurance is to give your loved ones the money that they need if something tragic were to happen to you. Be sure to add up your mortgage, student loans, and burial fees. All of these can add up to thousands and thousands of dollars of debt, and that’s where your insurance plan comes in.
The next number that you should add up is your paycheck. The secondary goal of your insurance policy is to replace your paycheck. If you’re one of the mina income earners in your home, they would struggle if something were to happen to you. That’s where your life insurance comes in. It gives them the money that they need to get through the difficult time without sacrificing their standard of living.
We know that shopping for life insurance is not a fun experience. There are dozens of different factors that you’ll need to consider and several types of plans that you’ll need to compare. Instead of wasting hours and hours calling different companies to compare plans, let one of our independent insurance agents do all of the hard work for you. Our independent agents work with dozens of highly rated companies across the nation.
Every insurance company is different, and they all have different medical underwriting standards, which means that you’re going to get drastically different rates depending on which company that you get the quote from. If you want to get the lowest premiums, it’s important to compare dozens of quotes before you decide which one is going to work best for you, and our agents can help you do that in a matter of minutes. We can bring you the best personalized quotes and connect you with the perfect policy for you.
You never know what’s going to happen tomorrow, which means that you shouldn’t wait any longer to get life insurance protection for your family. We know that isn’t a frustrating and overwhelming process, but it doesn’t have to be. Our experienced agents are here to help you get quality insurance at an affordable price. It’s our mission to save you money and get your family the protection that they will need.
If you have any questions about IUL or you want to explore other options for life insurance, feel free to contact us at any time. We would be happy to answer those questions and ensure that you’re making an educated choice for your family.
To find out what will work best for your individual needs, take a minute to complete the quote request form on the left or give us a call at (800) 712-8519.