Life Insurance Retirement Plan – Here’s how IUL policies can help provide safety, liquidity, predictable rates of return, and tax advantages for your retirement nest egg
In these volatile economic times, you’re likely looking ahead to retirement, strategizing how to have enough money to not only cover expenses, but also to provide for a comfortable, abundant life.
How to Protect Yourself from Market Volatility
You’re not alone. Anyone who experienced the Great Recession knows that market volatility can cause significant losses to traditional accounts. In 2008, millions of Americans lost 40% of their 401(k) and IRA account values. That kind of hit can be tough, requiring years of positive gains to return to break-even. And if you’re close to retirement, you often don’t have the luxury of time.
During that same year, our clients who had money in properly structured, maximum-funded Indexed Universal Life policies (what I call IUL LASER Funds) didn’t lose a dime due to market volatility. They had peace of mind, knowing their policy values were protected by a 0% guaranteed floor. In the following years, they were able to benefit from upturns in the market, many experiencing significant gains.
How was this possible? One of the powerful advantages of maximum-funded IUL policies is indexing, or the ability to LINK your policy to market indexes like the S&P 500, without your money actually being IN the market. (For more on indexing, read my article, Understanding Indexing and What It Can Do for Your Future.) Indexing provides safety for your money, with its ability to protect your policy from losses due to market volatility.
How Life Insurance Compares to Traditional Accounts
You might be thinking right now that safety sounds good, but how on earth does a life insurance policy relate to retirement planning? A life insurance retirement plan?
You might be more familiar with traditional retirement planning vehicles, like IRAs, 401(k)s, stocks, bonds, mutual funds, and more. And yes, those can all serve a place in your overall financial portfolio, but as I teach in my books, YouTube channel, and national events, many of those vehicles can be limited when it comes to critical aspects of retirement planning, especially when compared to IUL LASER Funds.
In the book I coauthored with my sons, Emron Andrew and Aaron Andrew, “The LASER Fund,” we devote Chapter 10 to in-depth comparisons of IUL policies with traditional financial vehicles. Here’s a quick snapshot:
Liquidity
This is the ability to access your money when you need it. Some traditional vehicles prohibit you from accessing your money for a specified time period (like CDs), or you may be able to access it early, but you’ll pay a penalty for early withdrawal (like IRAs). With an IUL LASER Fund, however, you can access your money whenever you need it. This can be done tax-free (more on that later) via loan, which you’re not even required to repay if you don’t want to—any loan balances will be automatically paid off with the cash value / death benefit upon your passing. You simply need to keep the policy in force to avoid a taxable event.
Safety
Safety refers to both the safety of your principal, as well as the safety of the institutions you’re working with. As I mentioned earlier, IUL LASER Funds provide the unique advantage of indexing, which protects your principal from loss due to market volatility with a 0% guaranteed floor.
Financial vehicles that put your money directly in the market cannot provide the same level of safety—when the markets lose, so do your account values. And when it comes to safety of institutions, as evidenced during the Great Depression and Great Recession, when the economy takes a serious nose dive, banks fail long before any insurance companies. Insurance companies, on the other hand, are historically among the safest financial institutions, many currently touting more than 100 years of service.
Predictable Rates of Return
As we all know, the stock market giveth and taketh with its up years and down years, but IUL LASER Funds can provide greater predictability. IUL policies can earn interest based upon index strategies that have historically averaged 5% to 10%. And some years, IUL policies can earn 25% all the way up to 60% or more, like many did in 2021.
Tax Advantages
Ideally, you want retirement vehicles that allow your money to grow tax-free; you want to access your money income-tax-free; and when you pass away, you want to transfer your money to your heirs income-tax-free. All of that happens with an IUL LASER Fund. Other vehicles provide some of these tax advantages, but not all. Take an IRA, for example. You can contribute pre-tax money and enjoy tax-free growth, but you’ll pay taxes on the back end when you withdraw your money—often at a time in life when you’ll find yourself retired and in a tax bracket that’s as high or higher than your earning years.
This is why wealthy people who are in the know have multiple life insurance policies all working for them to plan ahead for retirement. If you’re interested in discovering what they know, let me show you how.
Want to Learn More?
Watch the Video
Watch the related YouTube video to see me explain “What Is the Best Lifetime Investment?” (and while you’re there, be sure to subscribe to my YouTube channel so you don’t miss a thing!).
Elevate Your Financial Dimension
Find out how you can improve your Financial Dimension journey and seize the liquidity, safety, predictable rates of return, and tax advantages of an IUL LASER Fund. Explore the in-depth financial strategies and learn from real-life client experiences by claiming your free copy of “The LASER Fund” book at LASERFund.com. Just pay for shipping and handling, and we will send it to you, absolutely free.
Join a Webinar
Want to find out if an IUL LASER Fund (a maximum-funded, properly structured indexed universal life insurance policy) is right for you? Join us for an upcoming webinar where you can explore these strategies.
