Sometimes advisors ask me to explain what I mean by being self-insured with IUL (Indexed Universal Life insurance).
Here’s how it works:
Imagine a 60-year-old male who wants to reposition $500,000 into an IUL policy to increase the liquidity, safety, predictable rates of return, and tax advantages of that money.
We take the least amount of insurance under TEFRA and DEFRA regulations, which would be about $1 million in coverage.
We then maximum fund the policy with that $500,000 over a five-year period, in compliance with TAMRA.
Once the $500,000 is in the IUL, the net amount at risk is only the remaining $500,000.
As this amount doubles, typically in about 7.5 years, to $1 million dollars, his cash value equals the death benefit, and he essentially becomes self-insured.
As the policy’s cash value continues to grow, his policy can have significantly more money than the original death benefit.
This is how IUL can actually become cheaper as you get older, because the net amount of risk decreases over time.
To learn more about how IUL can help you get ahead, click on the link or go to laserfund.com to claim your free copy of my book, “The LASER Fund.”
Contribute a nominal amount towards shipping and handling, and I’ll cover the rest. #shorts
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