2023 · 5 min

People Are Building Generational Wealth With This Under-Utilized Policy


IULs Reduce People’s Biggest Fears

Indexed Universal Life Insurance has exploded from a little-known, niche product to one of the fastest growing wealth building tools. Here’s why:

People fear they’ll die prematurely and leave their families in a poor financial position. They also fear living too long and running out of savings. Indexed Universal Life insurance helps with both because IULs offer a death-benefit and the ability to loan cash in the policy to yourself later in life. The death-benefit portion is pretty straightforward. Let’s say your policy has a $1,000,000 death benefit. When you pass, that $1,000,000 is paid, tax-free, to your beneficiary.

It’s the cash-value component of these policies that has caused them to explode in popularity. More specifically it’s the following:

Protection From Down Markets

Funds in these policies can participate in market gains via performance of an index, such as the S&P 500, up to a cap, while being insulated from market losses, because there is usually a floor of 0% returns.

Access To Money

You can typically access the money in an active policy tax-free, while you’re alive.

Generational Wealth Building

When you pass away, the funds accumulated in your policy can be paid to your beneficiary.

Surprising Growth Potential

You could build a surprising amount of cash-value.

Here’s a calculator that shows how much cash you could build up.

IUL Money Calculator

Your premiums grow between a cap of 9% and a floor of 0% yearly with an average rate of 6-8%. This means you never lose money and lock in gains every year. Did I mention it’s all tax-free?

monthly premium

*Tables and charts are for illustrative purposes only and are not based on any specific policy example. Please reference your specific policy for additional details. All guarantees and contractual obligations are based solely on the claims-paying ability of the issuing life insurance company. A death benefit will be associated with the policy based on an individual's age and health.

You Could Become Your Own Bank

Need money for retirement?

Your IUL could help.

Want a way to fund your kid’s college tuition?

IULs can be great for that.

Want to focus on building generational wealth for your family?

People have used IULs for that for decades.

Because you can loan the cash in the policy to yourself, you can effectively become your own bank. And because you’re the bank, you don’t need to give a reason for the loan and you can even decide when or if you want to pay the loan back. (If you don’t pay it back while you’re alive, the outstanding balance is simply deducted from what your beneficiaries get). All of this is why IULs are exploding in popularity. 

There is no other single financial tool that can protect your family, protect you against market volatility, reduce your taxes later in life, and give you the flexibility that comes from having a pool of funds you could tap into.

To learn more and see if you qualify for an IUL, simply tap your state below.

see if you qualify

1. The policy must be in force and all required premiums paid.

2. Access to the funds is typically through a loan or withdrawal. Loans or withdrawals will reduce the death benefit, cash surrender value, and may increase the likelihood of policy lapse.

3. Certain policy elections may need to be made to structure this death benefit type.

Source: https://www.limra.com/en/newsroom/news-releases/2022/limra-u.s.-life-insurance-new-annualized-premium-growth-continues-in-second-quarter-2022/