In last month’s article on tax-free retirement, Texas Trusted Advisors addressed three factors that could impact your retirement plan, including health, taxes, and market risks—challenges many people have experienced. This month, Texas Trusted Advisors dives deeper into the benefits of an Indexed Universal Life (IUL) policy.
THE BASICS
Setting up an IUL policy has provided assistance for many families, thanks to the policy’s health benefits, tax-free retirement, and tax-free death benefits. This type of policy has several moving parts with regard to client age, health, and the amount of premium paid into the policy. Here are some ways an IUL policy can work for you.
If you purchase an IUL policy and happen to have a chronic or critical illness along the way, you may take a portion of your tax-free death benefit. If it is a terminal illness, you can take up to 90 percent. With these benefits, you could seek treatment anywhere in the world.
The IUL product will ease the pain of taking money from an IRA or 401(k) when tax time comes. If you need $50,000 for health benefits not covered by your health insurance, it is important to take out enough to pay the taxes as well. But with an IUL policy, you can take out money without owing the IRS.
In an IUL policy, the death benefit with Option B allows your cash value to be included in your death benefit. For example, with a $250,000 death benefit and after ten years of funding, your cash value may have increased to $100,000, which is added to your death benefit for a total of $350,000.
WORKING FOR YOU
There are countless ways to use the cash gained from your IUL policy, including a tax-free savings account, buying a new car, remodeling your home, building a pool, or other investment of your choice. Plus, if you pay the loan back, you become the big winner.
Texas Trusted Advisors has helped people for more than 40 years and can be reached at 512-261-7660 for a free consultation. Scan the code to learn more.
This is the second in a series of articles to give readers peace of mind when it comes to finance. Stay tuned for next month’s article that will talk more about ways to protect your assets and ensure a successful retirement.