An IUL can provide you with all the following
- Cash accumulation
- Interest rate of up to 15%
- Safety of funds (guaranteed minimum interest rate) No losses due to market decline
- Tax advantage (tax free withdrawals & tax-free loans)
- Permanent life insurance protection which provides medical benefits for qualified illnesses as well as lump sum cash payout in case of death
- Protection against law suits, judgement, divorce or any legal action.
- Access to your money at any age, no age restriction
- Life Time Income after accumulating for as little as 7 years
- Loan interest rate less than 1%
- Flexibility, Inputs may vary up or down and changes in coverage can be made
- Term insurance is only for a term such as 10yrs, 20yrs or 30yrs
- To receive money from Term Insurance the insured must die within the term
- If the insured does not die within the term then all premiums paid over the years are kept by the insurance company.
- As a result, many people with Term Insurance end up late in life with No insurance and in many cases, they can longer purchase insurance due to age or poor health.
- Term Insurance does not provide Cash Accumulation
- No flexibility, (No payment, No insurance coverage).
Whole life insurance
- Whole life insurance requires the insured to make payments for his whole life
- Interest rate on the cash value is at a low fixed rate (generally about 4%)
- Interest rate on loans from the policy is high (generally 8 – 9%)
- No Flexibility, Death benefit is fixed, Input is fixed
- Not designed to provide Life Time Income
Universal Life (UL or VUL)
These products either offer a low fixed rate of interest on your cash or they are invested in the market which:
- Has No Floor or Guaranteed Minimum interest rate
- Subject to Market Losses which could wipe out a large portion of your cash overnight
- The interest rate in Banks are extremely low and provides little or no growth. Some interest rates are as low as .001% which is almost nothing.
- Any growth on money in the bank is Taxable. Tax could eat away over 25% of your earnings
- There is no life insurance attached to your savings in the bank. In case of major illness or death your family gets only the amount that you have saved
- The money in these accounts are mostly invested in the market.
- No safety, you could lose a large portion of your savings overnight
- You must pay taxes when withdrawing funds
- You also pay penalty if you touch your money before a certain age.
- No life insurance attached to these accounts. In case of major illness or death your family gets only what you have in the account.
- These accounts come with various age restrictions
- Your money is mostly invested in the stock market. You could lose a significant portion of your money overnight.
- This is a taxable account
- Comes with many restrictions including age restrictions
- No life Insurance. In case of major illness or death your family gets only the amount that you have saved in the account.
- You could lose a large portion of your money overnight due to stock market decline
- Comes with many restrictions. It restricts how much money you can put into the account and it restricts how much you can take out.
- Various Age Restrictions regarding when you can access your cash etc.
- No Life Insurance. In case of major illness or death your family gets only what you have in your account.
- Mostly low fixed interest rate (generally 3 – 4%)
- You could be required to wait 10 – 15 years before you can touch your money
- Some Annuities does not allow Lump Sum payout you must accept small periodic payouts
- Gains are taxable
- No Life Insurance. In case of major illness or death your family gets only what you have in the account.
- Funds are mostly in the stock market. No Guarantees, No Floor. You could lose a large portion of your money overnight.
- Gains are Taxable
- No life Insurance. In case of major illness or death your family gets only what you have in the account.
- No interest on your money, No Growth with money under the mattress
- No safety, subject to thieves
- In case of major illness or death your family receives only the amount that you have saved under the mattress