• DEATH BENEFIT

One of the most significant benefits of an IUL policy is the Death Benefit. An IUL is an insurance product that lets holders insure the ultimate asset: your life. Losing a loved one leaves a void that money can never fill. Dealing with the death of a loved one with the addition of financial hardship caused by loss of income, funeral expenses, etc. can worsen the effect on your family’s mental and financial health.

• TAX-FREE INCOME

Insurance companies have designed a way for you to be able to access your cash value, tax free. The IUL cash value may be taken as a tax-free income using the Policy Loan Provision.

• NO AGE OR INCOME REQUIREMENT/ COLLEGE FUNDING

Unlike tax-qualified plans, such as an IRA, life insurance has no minimum age that an individual must attain to put this strategy into action. Nor does an individual need to have earned income in order to contribute.

For example, you can purchase a policy for your children in order to save for college or to give them a head start in life. The results can be stunning because it enables you to add 20 plus years of tax-deferred growth to the IUL cash value.

• TAX DEFERRED GROWTH

It’s very important to understand that IUL policy cash values grow tax-deferred, not tax free. In other words, if you were to simply withdraw all of your funds, or cancel the policy, especially in the later years, then all of the gain (the amount above what you started with) would be subject to income tax but not capital gains tax.

• NO TAXATION OF SOCIAL SECURITY BENEFITS

What many people don’t know is that a percentage of their social security benefits can now be taxed as income when received. All money that comes from a tax-qualified plan (401k, 457, SEP, SIMPLE, IRA etc.) during retirement will be combined with their Social Security income and taxed as such. However, income from an IUL policy, whether it be via withdrawal or loan, does not subject an individual’s social security income to be taxed. This can increase your retirement income.

• LIVING BENEFITS

 Chronic Illness, Terminal Illness, Critical Illness and Critical Injury Rider

Under certain qualifying events, an IUL policy allows you to pull cash from the death benefit of the policy without any penalty. Such instances would include diagnosis of a terminal illness that would result in death within a 12 -24-month period depending on the state; the inability to perform two out of the six “activities of daily living” for a period of at least 90 consecutive days without assistance, or that you are generally cognitively impaired; or the diagnosis of certain critical illnesses.

• UPSIDE GROWTH POTENTIAL WITH DOWNSIDE PROTECTION

This is one of the most incredible features of the IUL. The IUL policy contractually guarantees that your cash value will never have a negative return due to market losses.

• NO MANDATORY DISTRIBUTION REQUIREMENTS (”RMDS”)

One of the many problems of saving money in a tax-qualified plan like an IRA or 401(k), is that, not long after you turn 70, you are forced to begin to liquidate the account whether you need the money or not. The government does not get paid (taxes) unless you start withdrawing money. So, it forces you to begin withdrawals at 70 in order to get their hands on the portion of your retirement account that is essentially owed the tax.
The IUL, however does not come with this burden. You have control and you get to decide how and when you would like to use your money, not Uncle Sam.

• AVOID PROBATE

Because an IUL policy is a contract that has a named beneficiary, the death benefit is paid directly to the beneficiary within days of the death. It does not get tied up in probate or other legal issues. It provides quick, simple, easy and immediate cash benefit to the beneficiary.