An Example of How IUL Can Work

See how an indexed universal life (IUL) insurance policy can help supplement retirement savings goals.


An Example of How IUL Can Work for Retirement

If you’re looking for more control over your financial future – and a great way to supplement your retirement or other savings goals – indexed universal life insurance is an excellent option.

Here’s an example of how it might work for a 35-year-old man, who wants to retire at 70.  Now, that may not be you.  And it’s important to know that indexed universal life has a lot to offer people in their 40s, 50s and other ages – as well as people who want to retire early.  We can craft a solution that fits your specific situation.

Now, suppose this 35-year-old man needs life insurance to protect his family and a way to supplement his retirement income.

He buys an IUL policy with a death benefit of $400,000.  And he plans to contribute $6,000 annually until he reaches age 70.

By consistently funding his policy in this way, he can get the potential for tax-deferred cash accumulation plus tax-free loans from the policy value when he retires.

Over the next 35 years, he contributes $210,000 in premiums.  And assuming 6.69 percent annual interest, by age 70 he’ll have:

  • More than a million dollars in life insurance protection
  • And the policy’s cash accumulation value will grow to more than $631,000

At age 71, he could start taking $50,000 a year in supplemental retirement income through age 100.  And as quickly as five years later, it’s possible he’ll have withdrawn more money in loans than he paid in premiums over 35 years.

By age 90, he could receive almost $900,000 in tax-free income.  And should he die around this time, he could leave his survivors with more than $400,000 in tax-free life insurance benefits.

In fact, throughout all of the accumulation and disbursement years, he’ll get:

  • $400,000 or more of protection for his heirs
  • And the opportunity to take tax-free income through policy loans and withdrawals