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Who Should Buy IUL Insurance?

who should buy iul insurance
Insurance Quotes 2 Day Team

Written By Doug Mitchell

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University, a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA and Top of the Table member of the Million Dollar Round Table (MDRT). Doug has spent close to 30 years in the insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health.  Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

Holly Mitchell  &

Holly Mitchell’s background in life insurance insurance goes back to 1985 when she worked for her father who was a New York Life agent. Holly has a marketing degree from Auburn University and has had a life insurance license since 2008. In addition to advising life insurance for customers all around the country, Holly is our website fact checker.

Rob Pinner   &

Rob Pinner is the founder and CEO of Pinner Financial Services servicing all 50 states. Rob started his insurance career in 2002.

Louis LaBash

Results-driven and innovative life insurance professional with 30 plus years of life insurance industry sales and marketing experience. Recognized as a pioneer in the field, leveraging phone and internet channels to exceed personal sales of over $100 million during the first decade of the 21st century. Creator of a highly effective intuitive IUL life insurance sales software that facilitated the sale of millions of dollars of indexed universal policies by numerous life insurance agents. Proven track record as a Managing General Agent (MGA), Life Agent, IUL Life Insurance Sales Software developer, and leading-edge creator of insurance marketing tools, educational content, and delivery systems.

 6 minute read

I am 50. Should I Buy IUL Insurance?

Who should buy IUL insurance? Life insurance is one of the smartest financial decisions you can make for your family. It’s one of the only ways that you can ensure that your family has the money that they need if you die before you can earn and save enough to provide for them. While life insurance makes an excellent safety net, is it a good idea to buy indexed universal life when you are 50? Some people want their life insurance to supplement their income during retirement.  IUL can be perfect for both.

We get questions every day about indexed universal life insurance plans. This article will look at why it’s good to buy indexed universal life when you’re 50. We will also look at some of the advantages of these plans and the reasons that you should consider purchasing one of them.

We talk a lot about using IUL policies to help supplement our retirement income.  There are many great reasons to buy IUL at 50, and I will give you the best three reasons in this blog post.

Is IUL Worth It if you are 50?

Seems like most of our clients shoot for a retirement age of around 65.  Does that sound like you, too? Have you saved enough to retire at 65?  How much money does it take to retire?  With our low-interest rate environment today, it is hard to put a number on it.  I believe it was ING (now VOYA) that put out the commercials about your retirement number.  I would be more comfortable knowing what my income needed to be.  Let’s face it, age 65 is just 15 years away.

Wouldn’t it make more sense to focus on cash flow at retirement?  How much do you need now each month?  Keep in mind that you probably have a mortgage payment, car payments, expenses that are related to your employment, etc.  Just think about what you spend now that you will not be spending in retirement.  That could be a big number in itself. Many in the retirement planning space say that you will need anywhere from 65% to 85% of your pre-retirement income during retirement.  This amount is assuming that all of your income is taxable.  How much would you need if you paid no tax on your income?  It would certainly be less.

Indexed Universal Life at age 43 - never too late



IUL vs. Traditional Retirement Savings: A Comparative Overview

Here is an example of who should buy IUL insurance that I ran using an IUL calculator. It shows a 50-year-old male putting $10,000 annually into an indexed universal life insurance policy.  Saving just $10,000 per year for 15 years, making an average 7.28% return, would accumulate just over $230,000.  Now, using the same rate of return and putting the same amount of money into a 401k, 403b, or a SEP retirement plan would accumulate more cash – you would have over $250,000 in savings.  But let’s compare the income:

Remember, we want to know how much cash flow we will have, not how much cash.  Let’s assume that we take the same income from both the indexed UL policy and the Retirement plan of $22,406.  By taking that amount of income from both, the retirement plan will run out of money at age 82, but the life insurance policy will keep paying the $22,406 until age 100.

No, it is not magic.  The difference is taxes!  Your Retirement plan income is fully taxable at your current rate.  We are using 20% in this example.  Your life insurance income comes from policy loans and must not be repaid.  These loans are income tax-free when you receive the funds.

When most folks think about life insurance, they are not thinking about income.  Most of our clients equate life insurance to money their family will receive when they die.  Life insurance has come a long way.  We buy life insurance not only for the death benefit but also for the living benefits.  Living benefits can be tax-free income or income when you become critically or chronically ill.  Policies can now pay benefits when you get sick. My goal here is to show you a better way.

Hopefully, you have done a good job saving for retirement and currently have a disciplined routine for saving.  You may be on the right track, or you may need help.  Either way, using indexed universal life insurance as a supplemental tax-free income source should be considered.  Especially if you are in good health, even though we are talking about using this policy as an income source, it is still life insurance and will need to be underwritten for health.

Everyone is different.  Each policy we write is different.  We structure these policies to keep the death benefit as low as possible.  We do this to keep the expenses down so that the policy will provide the best growth possible.

Top 3 Advantages of Choosing IUL at Age 50

  • Use as a supplemental retirement plan or LIRP

  • Income is tax-free

  • IUL Policies include coverage for critical and chronic illness

IUL will probably not cover your entire retirement need, nor should you depend solely on IUL for retirement.  IUL is just one source of retirement income and should not be considered your only option.   IUL can provide a strong base for your income goals.  If you are 50, hopefully, you have already started saving for the golden years.  If not, indexed universal life may be a great way to play catch up for retirement.  In the example above, we showed what $10,000 per year can do with saving for just 15 years.  Many of our clients save much more than that.  Some of our clients save over $1,000,000 per year.  That shows you there is no limit as to how much you can contribute to an IUL.  My point is, whether you have $200 per month to contribute or $2000 per month, indexed ul could make sense.

It is not too late to buy indexed universal life when you are 50.  Sure, you are not 35 or even 45 years old anymore, but 15 years of saving could make a difference in your retirement income.

Who Should Buy IUL Insurance?

  • Middle to high-income individuals
  • Self Employed
  • Professionals and Physicians
  • Individuals who prefer flexibility in retirement planning
  • Young and healthy adults who want to start saving for retirement without the constraints of traditional retirement-planning products.
  • Those who will likely max out traditional retirement plans
  • Parents of children who will likely attend college 
  • Couples who are looking for supplemental retirement income 
  • Individuals who want to participate in the market without being subject to losses when the market underperforms.

Deciding which company is best for IUL can be a confusing process, but that’s why we are here. It’s our mission to ensure that you’re getting the best plan possible.  Each carrier is unique in its offerings, and we can give you the specifics to help you make an educated decision.

The best way to find out is to use our IUL calculator on this page.  We can create a presentation like the one we used in this article. All we will need from you is a little information about your goals and timing to get a personalized presentation put together for you.


Frequently Asked Questions

Is 50 too old to buy Indexed Universal Life Insurance?

It is not too late to buy indexed universal life insurance when you are 50.  Sure, you are not 35 or even 45 years old anymore, but 15 years of saving could make a difference in your retirement income. Contact Ogletree Financial Services to find out how!

Why should I buy Indexed Universal Life Insurance?

An IUL policy, in addition to having a death benefit, can be used as a supplemental retirement plan, provides tax-free income, and the policy includes critical & chronic illness payments. Contact Ogletree Financial Services to learn more about planning with Indexed Universal Life Insurance.

Who should buy IUL Insurance?

We buy life insurance not only for the death benefit but also for the living benefits.  Living benefits can be tax-free income or income when you become critically or chronically ill.  Policies can now pay benefits when you get sick. 
author avatar
Doug Mitchell, CLU Independant Advisor
Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA. Doug has spent almost 30 years in the life insurance industry and has also held licenses to sell securities, long-term care insurance and home and auto insurance. Doug is a Top of the Table Million Dollar Round Table member (MDRT).  MDRT is a global, independent association of the world's leading life insurance advisors.  For two years, Doug served as President of the Auburn Opelika Association of Financial Advisors and has been a member of the Million Dollar Round Table. He obtained Life Millionaire status at Horace Mann Insurance Company and was awarded the Life Agent of the Year Award. Later in his career with New York Life he was an Executive Council Member. Doug currently serves as President of Ogletree Financial, a managing general agency serving life insurance agents and clients in all parts of the United States. Today, Doug’s main focus is servicing 1000s of policyholders and growing the agency through the reach of