Indexed Universal Life Insurance as a ROTH IRA Alternative

Indexed Universal Life Insurance as a ROTH IRA Alternative

THE CONCEPT:

There are many vehicles for people to generate retirement income. IRA is an alternative policy. A Roth IRA is beneficial not only for a deferral of income but also income tax free. Of course, a Roth IRA has some disadvantages including the possibility of losses due to market (if you use mutual funds) and limitations for use including the contribution and income limits. When using indexed universal life policy, the cash value can be used to generate the benefits of a Roth IRA and more. The benefits of life insurance is the lack of evidence of the customer's income limits on contributions. For many life insurance can be an interesting option as an alternative or supplement to a ROTH IRA to the generation of retirement income.

SOLUTION:

An index universal life insurance policy will ensure the financial security and retirement, should anything happen before retirement. An index universal life insurance policy has several advantages:

    No limit for funding
    Income tax free if taken by loans and the policy remains in force
    Life insurance offers leveraged remaining after retirement assets on death benefit
    There are no early withdrawal penalties
    Private and probate free
    Competitive performance
    Downside protection benefits
    Accelerated Benefits chronic diseases

For the many people who are not authorized to fund a Roth IRA, or contribute any money you would like a, an index universal life insurance policy can be an attractive alternative.

There is a small but significant change happening in the world security. Most people do not think of life insurance as a potentially powerful part of a retirement plan. For many people, a properly structured indexed universal life insurance policy can be an interesting alternative ROTH IRA and one of the best ways to prepare for a comfortable retirement.

ROTH IRAs are often proposed as a great tool for retirement planning for a number of compelling reasons and indexed universal life insurance policies can offer many similar attractions.

Most people know that ROTH investors do not get the tax deduction as when contributing to traditional IRAs. But if you think taxes will be much higher in future than today, giving up initial deduction imposed today on a smaller amount of money in exchange for tax-free retirement income (on a larger amount of money) in the future is an intelligent compromise -off. More ROTH IRAs have no annual minimum required distributions starting at age 70 ½ or as a traditional IRA.

But the problem for many is that they earn too much money to fund a Roth IRA. Or even if people are qualified to contribute to a ROTH, the most you can contribute in any tax year is $ 5.000 - $ 6.000 depending on whether they are 50 years or more.

This is like an index universal life insurance policy fits into a situation where you want tax-free retirement income and financing flexibility.

If properly structured, the accumulation of money in a cash-value life insurance policy can be accessed through policy loans or withdrawals on a tax-free under the tax law that has been in force for decades. Index universal life insurance may be the fastest growing type of universal life insurance, because the money is credited with interest in politics on the basis of values ​​or performance index of the bond market without the risk of decline.

Most indexed universal life insurance (IUL) policies credit interest based on the performance of the S & P 500 (or some other market index or indices) subject to a cap annual crediting (usually between 11 -15%), and a plan of interest credits (usually 0% -2%) when the same index has a negative performance. Thus, when the index performs positively, but under the cap, money in politics will be credited with the same amount of interest. If the index performs better than the cap, the policy should be credited with the amount of interest subject to the cap. In years when the index is negative, the policy should be credited this "floor" of interest, but the accumulation of cash does not go back because of the negative performance