An Indexed Universal Life
Plan
 AS AN ASSET BUILDER &
 AS A LEGACY…
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
“More than 40% of Americans say the reason they don’t
have more life insurance is because of other financial
priorities.”
Facts
About Life 2010, LIMRA
Study
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An Indexed Universal Life As An Asset
Builder

Protecting Your Accumulation Potential.

Your policy’s potential cash value can accumulate tax
deferred and never decrease due to market volatility.

Options can include a fixed account; index accounts like
the S&P 500 or blended indexes.

Let’s take a look at how it can work for you.
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Traditional Ways To Build Assets

CD’s
Current Rate
.40%

Mutual Funds
Expense Cost
1.26%

Annuities
Expense Cost
3%

Managed Money
Expense Cost
2%

401K Qualified
Expense Cost
3%

Savings
Current Rate
.005%
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Expenses Of Your IUL
based on a 45 year old standard smoker male, using an illustrated crediting rate of 8.50%. This rate is
not guaranteed and is used as an example only of what current policy costs could be under current
assumptions paying in $1,000 per month.

Year 1; Death Benefit $220,892; Expenses $2,499; Account value $9,939 =

Year 10; Death Benefit $355,979; Expenses $2,804; Account Value $145,026 = 1.93%

Year 11; Death Benefit $378,959; Expenses $1,816; Account Value $168,006 =

Year 20; Death Benefit $687,226; Expenses $3,351; Account Value $476,273 = .70%

Year 30; Death Benefit $1,399,294; Expenses $7,097; Account Value $1,188,341 = .59%

Let’s compare: Your current situation (expenses):

401(K) = 3%

Mutual Funds = 1.26%

CD = .40% (Interest Rate) – 2.1% (CPI) = 1.7%
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25.14%
1.08%
Liquidity

“When you lose your job, the bank is not going to loan you money.”

Qualified plan have 10% penalties by the government if you withdraw
your money before age 59 ½ plus many have surrendered penalties
and fees on top of that!

Many CD’s have penalties forgoing your interest if you take them out
early.

Non qualified and qualified annuities have 10% penalties for
withdrawals before age 59 ½
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Take This Seriously
 You
can always figure out what percentage of
money you would like to put in your savings
plan… BUT… NO one can tell you how much
you will have when you leave the office for the
last time!
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Liquidity – Indexed Universal
Life

Let’s take a look at YOUR plan…

If something occurred in year five for instance, you would be able to
withdraw or take a loan of $_________ from your account.

Pay back as you can…

“So, where do you think would be the BEST place to put your
money?”
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Are Taxes Going Up or Down?

“Today, After an era of
very low taxes, we have
enormous inequality and a
huge deficit. Last time that
happened the top tax rate
soared!”

National Taxpayers Union
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Taxation
 If
you were a farmer, would you rather pay tax on
the “seed” or the “harvest”?
 25%
on a pack of $5 seeds would cost you $1.25.
 25%
on a $500 harvest… that would be $125.
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Taxation at Retirement

Did you realize you can be taxed on your social security?

Distributions from your 401k or other qualified account is
deemed as income so the amount will go “against” your
total income for the year.

With tax free distributions through loans with your Indexed
Universal Life Plan, it does NOT count as income!
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Taxation

RMD’s – Required Minimum Distributions – Generally, you have to
begin taking withdrawals from your IRA or retirement accounts when
you reach 70 ½

There are NO RMD’s associated with an Indexed universal Life
Plan.

There are NO minimum or maximum contributions to an Indexed
Universal Plan

Distributions can be tax free through loans. Indexed Universal Plans
account values are tax deferred.
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Arbitrage

Taking advantage of a price difference between two or
more markets.

Example: participating Loan has a guaranteed 5% interest
rate at purchase for the lifetime of the contract. In a year,
where the plan was credited 10% in your strategy, you made
5%.

In a year where the market was down and you were credited
zero, you lost 5%
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Arbitrage
 Here’s
the thing… looking back over our chart that
we used earlier to see how a “14% cap” vs. the S&P
fared, the market was actually up 12 out of the past
16 years! 3 out of 4. while historical figures are no
guarantee tomorrow, it might make sense to look at
the opportunity.
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An Indexed Universal Life Plan as a Legacy
 The
first law of Insurance states that you
should insure first that which you can least
afford to lose… your income, your health, and
your life. Think about that for a minute.
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An Indexed Universal Life Plan as a Legacy

“Nearly 70% of American households with children under 18 would be in financial
jeopardy if the primary breadwinner died.”
–Facts about life, 2010 LIMRA study

Life Insurance, if tragedy occurred, could provide:

Income replacement

Supplemental or pay for college funding

Payments or pay off of mortgage and other debts

Business succession

Estate tax coverage

Even final expenses
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An Indexed Universal Life Plan as a Legacy

Legacy – a gift, something handed down or received

What is YOUR legacy? How do you wish to be
remembered? Most people buy life insurance because they
care deeply about someone of something (a favorite charity,
etc.) or because they owe someone (death taxes, loans).
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An Indexed Universal Life Plan as a Legacy

Accelerated Death Benefit Rider – your policy would
include a Chronic Illness rider. If you are unable to
perform 2 of the 6 activities of daily living (bathing,
continence, dressing, eating, toileting or transferring), your
policy will pay (after a 90 day wait period) a portion not to
exceed the death benefit.
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Lets take a look at YOUR plan
 Let’s
compare and see if there is a potentially better method.
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