Do your clients want both a death benefit as well as a way to save for retirement without losing access to their money?
Unlike an IRA, a 401k, or other retirement account, an FIUL policy can address both needs. Not only can they rest assure that their loved ones are covered should they die prematurely, but they can also access any available cash values before age 59 1/2 without the 10% penalty they would otherwise incur for taking money out of their qualified retirement plan.
If structured properly, your client’s life insurance policy’s cash value can be accessed tax-free, via a policy loan or withdrawal. In addition, there are no income restrictions for making premium payments into a permanent life insurance policy.
Properly structured life insurance can offer your client various options:
- If your client dies too soon, it can offer a tax-free death benefit from day one that can be used for any purpose such as income replacement, paying off a mortgage, or college funding. Life insurance normally bypasses probate so the money can be distributed in a timely fashion.
- Many permanent life insurance policies, such as the fixed indexed universal life policies, offer access to the cash value for tax-free income throughout your client’s lifetime.
- If your client gets sick along the way, the optional riders for long-term care can be an effective strategy.
There is a widespread interest in individuals to find better ways to grow and protect their money. Fixed Indexed Universal Life (FIUL) policies offer a way for a client to grow cash with downside protection. Market volatility is a genuine concern for many clients. FIULs can offer the potential to earn interest tied to the movement of an external market index while protecting from the volatility and losses that occur when the market drops, because FIUL is a fixed insurance product and they are never invested in the market.
Here are some ways FIULs can offer your clients a tremendous amount of flexibility and control:
- They can tap into the tax advantages of using post-tax dollars to purchase life insurance. Money grows tax-free.
- They do not have to wait until 59 ½ to benefit from tax-free withdrawals of their cash value.
- They can provide a tax-free death benefit from day one if they die too soon.
- Offer options for living benefits such as long-term care or nursing home care if needed during their lifetime.