Long-Term Wealth

These days, life insurance offers so much more than just a death benefit. Actuaries have created a new version of life insurance that offers the same benefits of a traditional life insurance policy, but offers growth potential as well.

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It is called Index Universal Life Insurance (IUL).

 

Through a unique hedging strategy, a portion of the premiums made to this IUL policy participate in the gains of the market and are protected from any losses, creating an investment strategy that doubles as a powerful protection and retirement savings vehicle.

As the market goes up, your life insurance policy value will be given "index credits". If the market were to decline lower than the initial account value at the start of year (per the policy's anniversary date), it would not make any money but it would not lose any money. 

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This is called the "cap and floor" protection. As a trade-off for the 0% floor (your policy not participating in any negative returns), earnings are capped on the upside. 

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Since policies are funded with after-tax dollars, your gains, distributions, and death benefit transferred to your heirs are completely tax-free.

Many business owners and investors put off getting life insurance because of the traditionally large premiums required to protect their sizeable estate.

 

With Premium Financing, qualified individuals can use the bank's money to fund their Index Universal Life policy, instead of their own, keeping their cash flow where it suits their needs best.

 

As the policy grows through the index credits, the arbitrage often reaches double-digit returns...that are completely tax-free.

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Many sophisticated individuals use this strategy to fund buy/sell agreements, provide liquidity for their businesses, and to create their own private pension plan.