Non-Reportable, Tax-Free Income During Retirement By Using Index UL

There aren’t many investment vehicles available that offer the tax advantages of properly structured, permanent life insurance. Unfortunately, many clients are not aware of those benefits when purchasing term insurance, and they may not know about alternative product solutions.

Within your existing book of clients, do you have any individuals who are hitting the contribution limits in their qualified plans?

If so, Index Universal Life (UL) may be a great concept to introduce to them in your next meeting, as it can provide a number of benefits that are comparable to a qualified plan.
The following series of questions can be used to frame the benefits of Index UL, without specifically introducing the concept of life insurance:
  • Do you believe that taxes will be static, or fluctuate over your lifetime?
  • Are you contributing to any qualified retirement plans? If so, are you funding to the maximum limits of those plans?
  • Would you be willing to trade the benefits of interest crediting in order to remove the risk of losing accumulated values, due to downturns in the market?
  • Do you mind paying taxes on income that you receive from your non-qualified assets?
Many of your clients will meet the contribution limits in their qualified plans; believe taxes are only going to increase; will not like exposure to loss of accumulated values due to downturns in the market, and will not like paying taxes on their distributions.
All you need to do next is ask them is how much they would like to contribute monthly for a vehicle that has.
  • No contribution limits
  • No downside market risk
  • Compound interest crediting in the 10-12% range annually, without the possibility of losing their accounts’ value due to negative returns in the market
  • Non-reportable, tax-free distributions of their accounts’ accumulated value
Once your clients provide you with a premium commitment, we will help you to assess their insurability, and prepare proposals that solve for a minimum death benefit and provide the most efficient cash value accumulation.
Ideally, Index UL policies should be funded for 10-15 years prior to taking policy distributions, but they can be customized to meet many different specifications depending on your clients’ age and preferred premium schedule.
This strategy is not limited to clients who are maximizing their qualified plan contributions.
Index UL can be an efficient solution for younger clients (ages 30-50) who are looking to further fund their retirement, prepare for a child or grandchild’s school tuition costs, or contribute discretionary income into a product with the tax favored features mentioned above.
We will help you identify clients within your existing database who would be good prospects for this strategy, and will create customized solutions to meet their needs. To learn more about the Index UL products that are now available, and to explore how they can drive new sales opportunities – call your Life Sales Rep today.