People are looking for the most effective retirement strategy. Certificates of Deposit (CDs) are a safe option typically offered through banks and credit unions. Tax-advantaged retirement plans such as 401K, 403b, 457, and traditional IRA are market-based growth tools that offer tax deferral. Market-based investments offer high growth potential but also carry high risk. Those IRA and 401K accounts seem great for middle-class employees, but low contribution limits and high risk circumscribe their values for high-net-worth executives and entrepreneurs. If the $54,000 annual contribution limit in 2017 for 401K is not enough to satisfy the retirement objectives of the client, there are great alternatives with much lower risk. Indexed universal life insurance plans offer many of the same advantages and none of the limits of their traditional counterparts. People are not only using indexed universal life insurance for the death benefit but also as a way to grow their investment portfolio for retirement.
Indexed Universal Life Insurance for Retirement
Indexed universal life insurance plans offer permanent life insurance protection with the opportunity to earn stock market like returns in the policy. Whether people are considering life insurance for personal or business needs, an indexed universal life insurance policy could be a great solution. Like other forms of permanent life insurance, the premium payments and the account balance may earn interest and grow the cash value of your policy. This cash value can be used to supplement your retirement or even finance practically everything you would normally ask the bank for such as personal loans for cars, homes, home improvements and even college expenses.
Typically, people have several different kinds of assets working for them simultaneously, from indexed universal life insurance policies, stock portfolios to employer-sponsored 401K programs. An indexed universal life insurance policy builds cash value on a tax-deferred basis. In addition, the cash value can normally be accessed tax-free through policy loans. Even if the index goes down, your credited interest rate is guaranteed never negative. So your worst case return for a year is 0%. With indexed universal life insurance policies, you don’t participate directly in the stock market and the credited interest rate is never less than zero percent, guaranteed.
Our clients can apply for a guaranteed renewable indexed universal life insurance policy, which ensures that their premiums will not be increased and they do not have to worry about re–qualifying. Our clients can keep the policy as long as they pay the flexible premiums. Even if our clients are single without children to support, it is still necessary and important to have indexed universal life insurance, as they don’t have a spouse or other immediate family members to help them get by should they become seriously ill.
Indexed Universal Life Insurance Policies Protect Your Income with Living Benefits
How much indexed universal life insurance our clients should carry depends on how much debt they have, how much income they need to replace and the cost of any future obligations they want to fund, such as the emergency, the college tuition for a child, etc. When structured properly as an accumulation vehicle, you would want to pay the maximum premium possible while keeping the death benefit to a minimum. The indexed universal life insurance policy premium is flexible. This means that the insured can increase or decrease the premium to the policy as finances change. They may even stop paying premiums for a while if needed. The more premium (below the maximum 7-Pay Premium) paid into the policy, the better it will perform. For example, the ideal minimum premium (maybe called as Guideline Level Premium) for a 40-year-old client in a $250,000 policy with one of the top life insurance companies would be $304.39 per month ($3,653 yearly) for 25 years (total of $91,317) and the maximum would be around $808.00 per month to make the policy passed the 7-Pay Test of the anti-money laundering law for a bit more than seven years (total of $68,000). The maximum 7-Pay Premium payable in year one is $9,704.76. Payments of more than that amount of premium would be a violation of the 7-Pay Test as defined under the Internal Revenue Code section 7702A and would result in the loss of favorable tax treatment on withdrawals and loans from the Policy. If such a violation occurs, the holder will be notified by the insurance company. If this 40-year-old client will fund the policy for 25 years to age 65, he would have over $163,282 in cash value. This is based on just earning on average 7% per year. Assume that he starts to take the income at age 66 and lived to age 90, he would have received over a million and the death benefit at that time left to his beneficiaries would be a little over $250,000. So for around $68,000 to $91,317 of total premiums paid into the policy, the income he received, plus the death benefit that the beneficiaries will receive, is about millions of dollars. If instead, he chooses to contribute these funds into his 401K, the income would run out at age 80. That amount of millions of dollars throughout his lifetime is a very high return on investment advantage provided by the living benefits of indexed universal life insurance over what the 401K will.
The built-in accelerated death benefits allow the indexed universal life insurance policy owner to accelerate part of the death benefit for many qualified critical, chronic and terminal illnesses without having to die. We all have a family member or friend who has suffered from heart attack, cancers, strokes, or even losing the ability to care for themselves due to an accident or illness. Having these built-in accelerated death benefits attached to your indexed universal life insurance policy can allow you to receive funds at the time these events occur. That can be a game changer to your family financial future.
Boston FFS Insurance Services Are Helping Underserved People
We, at Boston FFS Insurance Services, can get our clients the exclusive innovative indexed universal life insurance plans in their best interest. Our clients do not have to deal with any sudden need to make ends meet at short notice. We are professional, extremely attentive and timely. It can be a pleasure for our clients to work with us. We teach clients innovative financial concepts that will become an important part of their strategy to enjoy financial security and peace of mind. We care about and help people from all walks of life looking for a way to turn their lives around and build a better future so that they can achieve a financially secure future. Planning today offers peace of mind for the uncertainties of tomorrow. Now, people buy indexed universal life insurance as a way to help replace income lost if something happens to them prematurely. Indexed universal life insurance can also help to pay off debt and mortgage, education and medical costs, and daily living expenses. We work with young professionals and business owners who are struggling with how to know what they can afford, how much they need to pay for a premium and what type of our exclusive and innovative plans would be best for them. We help them by offering a free buyer consultation that will show them what they can afford, what their premium payment would need to be and a list of Indexed Universal Life Insurance plans perfect for them in less than 30 minutes. Just fill out this complimentary FFS Needs Analysis Data Form and call or text me to 617-291-5089 for your illustrations.