Tax-Free Retirement

Indexed Universal Life (IUL)

Get a head start on your future retirement

Create a tax-free retirement plan for as little as $100/month

IUL is a permanent life insurance policy that offers death benefit protection, living benefits, and cash value growth.

IUL Explained General Overview- 3:30 Min

Take a Closer Look at How Index Crediting Works – 2:30 Min

We specialize in being able to take risks off of the table while giving you 100% of the upside of market gains. This way, our clients don’t have to make up for losses when the market drops. This is called ‘indexing’.

Watch further to discover how IUL’s take the risk OFF the table, while still making great gains. Yes, have your cake and eat it too!

What is the point of having cake if you can’t eat it? Seems like a silly phrase.

How Index Crediting Works at a Glance

We can use this policy to eliminate risk, create a massive asset, and even give you 300% more income at retirement. Oh, and if the S&P 500 index, or the Merrill Lynch proprietary index goes up 10% in a year, so does your cash value. If it goes up 50%, your cash value goes up 50%. If the index LOSES money if it drops. Your account stays flat.

You see, in an IUL policy, your gains are LOCKED IN each year, and they become part of your original principle. It looks like this, below is a real number illustration over 17 years.

So how big are the gains?

Well, that depends on how well the market does in a given year. I can tell you that we’ve averaged 6-7%, while the S&P 500 has only had an ACTUAL Rate of Return of less than 4%….and 89% of financial advisors cannot beat the S&P in any given year. Think about this when you’re giving your money to Edward Jones or money managers.

You have to look at the ACTUAL rate of return, not just the “average” rate of return, which is highly deceptive. Example:

Let’s say your account value is $100,000. It drops 50% because North Korea is being ugly. Now you have $50,000. Next year, it regains 50%. Now the average rate of return would put your losses at zero, or back at even. But you aren’t even. If your account drops 50%, bringing you down to $50,000 in value, then goes up 50%, you’re only back up to $75,000. You’re still 25% in the hole.

So, the Average Rate of Return is just a lie, it’s a myth, it’s meaningless.

IUL's vs. 401K or IRA Part 1 of 3 Must Watch Videos - 9:30 Min

Interest is credited to your policy via a declared fixed rate or based on a formula that tracks the movement of a selected stock market index over a particular time frame, known as a segment.

There are a lot of negative articles on Indexed Universal Life. Frankly, the majority are written by individuals or businesses that have an axe to grind with alternative investment strategies contrary to the ones that they push (think IRA’s & mutual funds). But for those of you who are seeking to gain a stronger grasp of IUL’s you will find the following videos very helpful and insightful.

Learn how Indexed Universal Life Insurance (IUL) can capture stock market growth while providing 100% protection from market losses. Life Insurance has changed drastically in the last 25 years! This unique wealth-accumulation vehicle provides policy-holders with the potential to enjoy a happy, healthy, non-taxable retirement.

Why gamble with your family’s future?

IUL vs. 401K or IRA Part 2 of 3 - 7:30 Min

IUL's vs. 401K or IRA Part 1 of 3 Must Watch Videos - 9:30 Min

IUL Fees vs. 401K's

Now that we’ve eliminated the risk to your principle, guaranteed never to lose money, and we’re participating in much higher market gains, let’s talk about fees.

Fees:

What is your 401(k) charging you in fees? Do you know? Have you investigated it? This is pretty important for the growth of your money, especially since this money will be taxed in the future. I can tell you on average, that 401(k) TOTAL fees, including all of the hidden fees in mutual funds, etc, average around 3% per year. Now, remember, the S&P 500 has only averaged a 3.39% Actual Rate of Return over the past 18 years….and let’s also remember that 89% of financial advisors cannot beat the S&P year to year. IUL policies are indexed TO the S&P or another index. Therefore, they go up with the index goes up, but don’t get down when it goes down.

What are the fees covering? They are buying you the expertise of those managing your money. That’s it. If you get sick, you get your money back after tax to pay your medical copay. If you die, your heirs get your money, after it’s been beaten to death with taxes.

What do fees cover with an IUL? The cost of insurance. Remember, we do not sell these solely as a safe place to put your money that will gain 100% of the market upside, with 0% of the downside. This is also an insurance policy with a death benefit, should it be required. If I were to hand your spouse a check for $1 million dollars, that costs money to provide that coverage. If I were to hand YOU a check for 90% of the death benefit, in the event of illness…that coverage costs money. However, your death benefit amount will always, 100% of the time, be worth more than the money you put into it, and it’s tax-free. Can your financial advisor say the same?

IUL has fees, and in total, they will be pretty close to the fees of a financial advisor for over 30 years. However, we offer you liquidity, safety, upside gains that are at least double that of the S&P over the past 18 years.

In the illustration below, the client has $490,634 in assets in a typical money management account. His government 401(k) plan grows to an estimated $506,420 at retirement.

We illustrated apples to apples with what our IUL will do for him, vs his managed, risk-based, account. We were able to project $52,841 in income, until age 120.

All things being equal, using his government-backed 401(k) plan, he’s out of money at age 71.

(fees illustrated until age 80 for IUL, and until runs out of money for 401(k)

Total Fees for 401(k) at 3%: $212,909 (no death benefit)

Total Fees for an IUL with a $1.4 million Death Benefit: $80,959

(btw, with our IUL death benefit, if he gets sick we’ll give him a check for up to $1,260,000 tax-free)

In most illustrations, we can get you more income at retirement than your financial advisor can, and you will never run out of money. When they try to match the income we can provide our clients with a properly structured, the client runs out of money by their mid-seventies. They CANNOT match us on income, on the death benefit, on living benefits (up to 90% of the death benefit), or a tax-free retirement until age 120.

IUL vs. 401K Benefits Illustration at a Glance

Check out the illustration below, based on a $1 million death benefit IUL vs. a 401(k) with the same investment amount.

In Summary

10 Top Pros of Indexed Universal Life Insurance

1. Death Benefit

2. Cash Accumulation

3. Gains are locked in

4. Protection against market loss

5. No Mandatory Distribution

6. Upside Growth Potential

7. Tax-Deferred

8. Access Cash Value at any age

9. Does not impact Social Security Taxation

10. Last but Certainly Not Least- “Living Benefits”

Living Benefits or Bust!!!

Living benefits are the biggest thing to come along in life insurance in many years. In simple terms, living benefits are riders to your policy that provide benefits before you pass away. These enhanced benefits allow you to accelerate all or a portion of your life insurance death benefit while you’re still living. Below is a quick glance at the most common living benefits included with IUL policies:

• Terminal Illness: Insured policyholder is diagnosed as terminally ill and has 12-24 months to live.

• Chronic Illness: Insured cannot complete some minimum specified activities of daily living.

• Critical Illness: Critical illness benefit has many triggers such as heart attack, cancer, kidney failure, or stroke. Normally, the greater the severity of the illness, the greater the living benefit payout. For example, Stage 3 cancer has a higher paying lump sum benefit than Stage 2 cancer.

• Critical Injury (an Industry First by National Life Group): The client experiences severe burns, traumatic brain injury, paralysis, or coma. Most companies do not offer critical injury benefits, so it’s important to ask your agent if your policy options include this benefit.

Why would you want a life insurance policy that doesn’t allow you to access the death benefit funds if you were to get sick or injured?

In Conclusion

The IUL is the fastest growing insurance product in our industry, and for good reason. It provides safe, productive growth and can be a reliable supplement to other tax-free streams of retirement income while providing for basic death benefit needs. Because of its popularity, those who are heavily invested in non-IUL strategies have plenty to lose. The IUL is an important component of a thoughtful, well-balanced approach to tax-free retirement planning.

Every client is different and it’s NOT “one size fits all” when it comes to choosing IUL’s which are insurance-based product that provides a death benefit. Your age, health, body composition, lifestyle history, will affect your qualifications from one carrier to another which are important items to consider before helping you qualify you for an IUL that’s right for your unique needs. Remember to seek advice from an experienced independent agent like me with resources like Advantage One Brokers has who will provide all your options from multiple different insurance carriers that are best in class– not just what’s in their company’s best interest.

Let me shop from our 40+ carriers to find the best product that meets your family’s unique needs!

Ramon Fazah Agency Manager | Heartland Insurance Group

Ramon@ramonfazahagency.com

916-842-6208 Direct