A man in Clearwater, FL, claimed to have grown a grapefruit that looked exactly like an orange – except that it was bigger and yellow. The attempt at comparison is understandable given other features characteristic of both.
What if clients: 1) don’t have access to a qualified retirement plan, or 2) have maxed out on the qualified plan they have, or 3) are looking for a non-qualified benefit plan for themselves, key employees or others.
Although qualified plans and universal life policies are fruits of a different color, they still look a lot alike when used to provide funds for retirement.
Compare and consider:
|Standard Qualified Plan||Universal Life Insurance|
|Tax-Deferred Growth Within||Yes||Yes|
|Nontaxable “Cost of Insurance”||
No (Must report economic benefit for coverage under the plan)
Yes (COIs are paid internally with untaxed returns on the cash value)
|Uninterrupted Accumulation After Age 70-1/2||No||Yes|
|Non-Taxable Withdrawal of Funds||No||Yes (Non-MEC FIFO withdrawals and loans)|
|Early Withdrawals Free of Penalties||No||
Yes (Assuming a non-MEC contract outside the surrender charge period)
Call today for a ledger illustrating an over-funded UL product that demonstrates an attractive withdrawal strategy during your client’s retirement years to supplement their retirement income from other sources.
Remember: The biggest asset your clients may have available for their retirement planning could be their insurability!
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