Indexed Universal Life Insurance as a Supplemental Planning Strategy

Indexed Universal Life insurance can be used in specific situations to support long-term planning, tax-efficient growth, and legacy objectives when structured appropriately.

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What Is an Indexed Universal Life Insurance Policy?

Indexed Universal Life (IUL) insurance is a form of permanent life insurance that includes both a death benefit and a cash value component. The cash value grows on a tax-deferred basis and may be credited based on the performance of a market index, such as the S&P 500, subject to caps, participation rates, or other limitations.

IUL policies provide downside protection through a guaranteed floor, while still allowing for potential interest credits during positive market periods. When structured properly, IULs may be used as part of a long-term planning strategy focused on supplemental income, tax efficiency, and legacy planning.

IULs are not designed to replace traditional retirement income strategies and are only appropriate in specific planning scenarios.

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Key Benefits of an IUL

✅ Policy Loan Access

Access to policy loans may be available, allowing flexibility to use cash value for various needs. Loans accrue interest and may impact policy performance if not managed properly.

✅ Tax-Advantaged Cash Value Growth

Cash value grows on a tax-deferred basis. When structured and maintained correctly, distributions may be taken on a tax-advantaged basis, subject to policy guidelines and tax law.

✅ Supplemental Income Potential

In certain long-term scenarios, IULs may provide supplemental income during retirement. These strategies require careful design and ongoing monitoring.

✅ Life Insurance Protection

IULs provide a death benefit designed to help protect beneficiaries and support legacy planning objectives.

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✅ Educational IUL Case Study Walkthrough

The following example is for educational purposes and illustrates a possible policy design scenario.

Actual results will vary based on policy structure, funding, carrier assumptions, and market conditions.

When an IUL May Not Be Appropriate

Indexed Universal Life insurance is not suitable for everyone. It may not be appropriate for individuals with short time horizons, limited cash flow flexibility, or those seeking immediate retirement income. Our role is to help determine whether an IUL fits within your broader financial and retirement strategy.

Key Benefits

Tax-Free Growth

Earnings on the cash value component are tax-free, allowing your money to grow faster.

Be Your Own Bank

Have unpenalized access to your cash value. Ability to use your growth for various purposes, such as retirement income, education expenses, or emergency funds.

Create Your Own Pension

When you're ready to retire, turn on a Lifetime Income of tax-free retirement funds that will NEVER expire

Death Benefit

Provides a guaranteed TAX-FREE death benefit to your beneficiaries, ensuring financial security and generational wealth for them.

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