Who ought to purchase IUL insurance? One of the best financial choices you can make for your family is to purchase life insurance. If you pass away before earning and saving enough to support your family, it’s one of the only methods to make sure they have the money they need. Is purchasing indexed universal life insurance at age 50 wise, even if life insurance is a great safety net? Some people choose to use their life insurance to augment their retirement income. Both can benefit greatly from IUL.
Every day, we receive inquiries concerning indexed universal life insurance policies. The benefits of purchasing indexed universal life insurance at age 50 will be examined in this article. We will also examine some of these plans’ benefits and why you should consider getting one.
We frequently discuss how we might augment our retirement income with IUL plans. There are plenty of excellent reasons to purchase IUL at 50, but I’ll list the top three in this blog post.
IUL: Is It Worth It for Someone Over 50?
Most of our clientele apparently aim for a retirement age of approximately 65. Do you also sound like that? Do you have enough saved for a 65-year-old retirement? What is the required retirement income? It isn’t easy to quantify in the current low-interest-rate climate. I think the ads regarding your retirement number were released by ING (now VOYA). Knowing what my required income was would make me feel more at ease. Age 65 is only fifteen years away, let’s face it.
Wouldn’t it make more sense to concentrate on cash flow at retirement? What is your current monthly requirement? Remember that you likely have a mortgage, auto payments, work-related expenses, etc., per month. Consider the expenses you incur today that you won’t have to pay for in retirement. That might be a significant amount on its own. According to several experts in retirement planning, you would require between 65 and 85 percent of your pre-retirement income in retirement. This figure is predicated on the idea that all your income is subject to taxes. How much would you need if you didn’t pay taxes on your income? It would undoubtedly be lower.
A Comparative Analysis of IUL and Conventional Retirement Savings
Using an IUL calculator, I came up with this illustration of who should purchase IUL insurance. It depicts a man in his 50s contributing $10,000 annually to an indexed universal life insurance policy. If you were to save $10,000 annually for 15 years and earn an average return of 7.28%, you would have slightly over $230,000. Now, you would have more money saved—more than $250,000—if you invested the same amount in a 401(k), 403(b), or SEP retirement plan with the same rate of return. Let’s compare the income, though:
Recall that we are interested in the amount of cash flow rather than the amount of cash. Assume the $22,406 income from the Retirement Plan and the Indexed UL policy are the same. The retirement plan will run out of money at age 82 if that income is taken from both, but the life insurance policy will continue to pay the $22,406 until age 100.
No, magic isn’t involved. Taxes make a difference! The income from your retirement plan is subject to full taxation at your current rate. In this example, 20% is being used. Policy loans are the source of your life insurance income and are non-repayable. You don’t have to pay income taxes when you get the money from these loans.
Most people don’t consider income when they consider life insurance. Most of our clients think life insurance will give their families money after passing away. Life insurance has advanced significantly. In addition to the death benefit, we also purchase life insurance for the living benefit. Tax-free income or income when you become seriously or chronically ill are examples of living benefits. Benefits from policies can now be paid when you become ill. I’m trying to show you a better method here.
Ideally, you have established a disciplined saving pattern and have done an excellent job saving for retirement. You might need assistance or be headed in the right direction. In any case, one should consider adopting indexed universal life insurance as an additional source of tax-free income. Even if we are talking about using this policy as a source of income, it is still life insurance and will need to be underwritten for health, especially if you are in good health.
Everybody is unique, and every policy we draft is unique. Our goal in designing these plans is to minimize the death benefit. We take this action to minimize costs and ensure optimal policy growth.
The top three benefits of selecting an IUL at age 50 are: • Use as a LIRP or supplemental retirement plan; • Income is tax-free; and • Critical and chronic sickness coverage is included in IUL policies.
You shouldn’t rely entirely on IUL for retirement, as it is unlikely to fulfill all of your needs. IUL should not be viewed as your sole retirement income alternative; it is merely one. IUL can give your income objectives a solid foundation. Hopefully, by the time you are fifty, you have already begun to save for your golden years. If not, playing catch-up for retirement with indexed universal life can be a terrific option. We demonstrated in the example above what $10,000 annually could accomplish with only 15 years of savings. Many of our clients save much more than that. Some of our customers save more than $1,000,000 annually. This demonstrates that there is no cap on the amount you can contribute to an IUL. My point is that indexed UL can make sense regardless of your monthly contribution amount—from $200 to $2000.
Purchasing indexed universal life insurance at age 50 is still possible. Even though you are no longer 35 or even 45, your retirement income may change if you save for 15 years.
Who Needs to Purchase IUL Insurance?
People with middle-class to upper-class incomes, self-employed people, professionals and doctors, people who desire flexibility in their retirement planning, and young, healthy adults who wish to begin saving for retirement without being constrained by conventional retirement planning tools.
- People who want to invest in the market without risking losses in the event of a market underperformance; • Parents of children who are expected to attend college; • Couples seeking supplemental retirement income; • Those who are likely to max out regular retirement plans.
It cannot be easy to choose the finest company for IUL, which is why we are here. Our goal is to ensure you receive the greatest plan available. Each carrier’s offerings vary, and we can provide you with the details so you can make an informed choice.
Using our IUL calculator on this page is the most effective approach to finding out. We can create a presentation similar to the one we used in this post. We will only require a small amount of information about your objectives and schedule to create a customized presentation.
Commonly Asked Questions
Is purchasing Indexed Universal Life Insurance too late for someone over 50?
Purchasing indexed universal life insurance at age 50 is still possible. Even though you are no longer 35 or even 45, your retirement income may change if you save for 15 years. To learn how, get in touch with KG Meyer, PC!
What makes Indexed Universal Life Insurance a good investment?
An IUL insurance offers tax-free income, critical and chronic illness payments, and a death benefit. It can also be utilized as a supplemental retirement plan. To learn more about Indexed Universal Life Insurance planning, contact KG Meyer, PC.
In addition to the death benefit, we also purchase life insurance for the living benefit. Tax-free income or income when you become seriously or chronically ill are examples of living benefits. Benefits from policies can now be paid when you become ill.
