Life insurance can help with inflation, tax, and longevity risks
The risks to retirement assets don’t go away in retirement. Clients are facing mounting risks that could significantly impact their financial well-being later in life, including:
The risks to retirement assets don’t go away in retirement. Clients are facing mounting risks that could significantly impact their financial well-being later in life, including:
When you consider all the advantages fixed index universal life (FIUL) insurance offers, it can be an attractive choice to help diversify a client’s portfolio – helping to protect them from uncertain risks in the future while providing a potential supplemental source of retirement income.
FIUL offers a combination of tax benefits other financial vehicles may not, including:
FIUL provides a combination of powerful protection features:
FIUL does not have the restrictions of other financial vehicles:
A successful financial strategy needs a mix of assets and financial vehicles to support and protect long-term goals. Use these resources to help showcase how an FIUL policy can play an important role in diversification.
The benefits of life insurance in a retirement portfolio (PDF)
Taxation and the impacts on your retirement assets (PDF)
How efficient is your retirement portfolio (PDF)
Balancing your portfolio's risk and return (PDF)
Three buckets to a retirement strategy (PDF)
Protect your assets and supplement retirement income (PDF)
[Narrator] Financial protection, the potential for supplemental retirement income, and Angie.
[Angela]Hi, I'm Angela. Most people call me Angie.
[On-screen disclosure] Hypothetical client for illustrative purposes. Not an actual Allianz client. [End of on-screen disclosure]
I'm 40 years old and I need to start giving my retirement some serious thought. I mean, I've got the dreams, but I know I'm going to need the income, too. Will I have enough money between my 401(k) and Social Security? How can market drops affect my savings? And what if something happens to me before I retire? Where would the money come from to take care of my Allison and Benji? So I need financial protection for my family, plus the potential for supplemental retirement income. Oh, and reducing my tax liability would be nice too. Am I asking for too much here? Well, my financial professional didn't think so. And he showed me how I can get a lot of what I need from one life insurance policy.
With fixed index universal life insurance, my family is protected through the death benefit if something happens to me.
[On-screen disclosure] The death benefit is generally income-tax-free to beneficiaries. [End of on-screen disclosure]
But even more, I also have the ability to build my assets for the future. That's because the accumulation value of my policy can grow over time, tax-deferred.
[On-screen disclosure] This hypothetical example is provided for illustrative purposes only and does not represent an actual Allianz client. Certain fees and expenses will reduce policy values. [End of on-screen disclosure]
But that's just the beginning, because my policy tracks the movements of a market index, but isn't actually invested. I can get an increase when the market is up, and if the index goes down, I won't lose anything due to the drop. My accumulation value is protected from market losses.
[On-screen disclosure] Policy loans and withdrawals will reduce the available cash value and death benefit and may cause unintended consequences, including lapse or taxable events. Please see full loan and withdrawal disclosure within this material for details. [End of on-screen disclosure]
And then down the line, I can access that money through policy loans and withdrawals that may be income-tax-free, and use it for whatever I want, like additional money in retirement so I can travel. To Paris, to Athens, or maybe I'll just get an RV and just hit the road.
[On-screen disclosure] Policy loans and withdrawals will reduce the available cash value and death benefit and may cause unintended consequences, including lapse or taxable events. Please see full loan and withdrawal disclosure within this material for details. [End of on-screen disclosure]
[Narrator] Accessing your money through your fixed index universal life insurance will not impact your Social Security retirement benefits. When properly designed, there are no penalties for accessing your cash value before age 59½, and there are no required minimum distributions. Be sure to monitor your policy values to avoid policy lapse and potential tax implications.
[Angela] Travel, buy a retirement home? With an RV, I can do both.
[Narrator] Find out how fixed index universal life insurance can help support your financial and retirement goals. Contact your financial professional.
[On-screen disclosures]
Life insurance requires health and financial underwriting.
Fixed index universal life insurance is not a source for guaranteed retirement income.
There is no guarantee that a policy will be credited with indexed interest in any given policy year or that a policy will earn sufficient interest to support a loan strategy.
Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.
Product and feature availability may vary by state and broker/dealer.
Guarantees are backed solely by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America (Allianz).
Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297.
800.950.1962. www.allianzlife.com
P64339
[End of on-screen disclosures]
[Narrator] Question: How can I take steps today to seek advantages in future tax environments? Allianz Answers.
National debt is rising in America. And, in time, you may expect your income taxes to rise too. Given the potential impact that could have on your accessible assets, it's wise to seek products with tax advantages that can help provide financial flexibility now and in the future.
One way to gain flexibility is through tax diversification. When you mix a variety of three basic tax categories using various financial vehicles within your financial portfolio.
Income-taxable vehicles may include a checking or savings account, stocks, bonds, or mutual funds.
[On-screen disclosure] Interest, dividends, and/or capital gains may be taxable each year. [End of on-screen disclosure]
Income-tax-deferred vehicles may include traditional IRAs, pensions, or nonqualified annuities.
[On-screen disclosure] Earnings grow tax-deferred each year. [End of on-screen disclosure]
And income-tax-free may include a Roth IRA or Roth 401K.
[On-screen disclosure] Earnings may be income-tax-free when certain requirements are met. [End of on-screen disclosure]
But what can make an income-tax diversified strategy worth considering? For one thing, it can help you manage your taxable income in retirement. For another, you could discover flexibility in other financial vehicles that you may have overlooked, like cash-value life insurance.
One such vehicle is fixed index universal life insurance, or FIUL. FIUL can provide valuable death benefit protection for your beneficiaries as well as the opportunity for additional benefits that can complement a tax-diversification strategy. FIUL also offers a combination of three tax advantages:
A death benefit that is generally income-tax-free. Tax-deferred cash value accumulation potential. And the opportunity for income-tax-free loans and withdrawals from any available cash value accumulation, which you can use for a variety of purposes, such as helping to supplement your sources of income and retirement.
[On-screen disclosure] Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional. [End of on-screen disclosure]
FIUL can help add financial flexibility during your retirement too. Because, you can choose to access more or less from your policy based on the tax environment and your retirement income sources. For instance, you may decide to access more from non-taxable sources such as your FIUL policy if you are in a higher tax rate environment in retirement than when you were paying premium into your policy. Conversely, if you are in a lower tax rate environment in retirement than when you were paying into your policy, you could access less from the FIUL policy and more from sources that provide taxable income, like a traditional IRA or 401(k). Keep in mind that how you fund your policy and other factors may affect how the loans and withdrawals are taxed.
[On-screen disclosure] FIUL does not provide a source of guaranteed income in retirement. Your policy must have sufficient cash value available, and you should monitor your policy values carefully to ensure against the policy lapsing. [End of on-screen disclosure]
FIUL insurance could be a good choice to help diversify your retirement strategy and potentially benefit you in retirement in any environment.
For more information about FIUL insurance, download our Understanding Fixed-Index Universal Life Insurance brochure. Talk to your financial professional and tax advisor to find out more about how FIUL can provide tax advantages for today and tomorrow.
[On-screen disclosures]
This content is for general educational purposes only. It is not intended to provide fiduciary, tax, or legal advice and cannot be used to avoid tax penalties; nor is it intended to market, promote, or recommend any tax plan or arrangement. Allianz Life Insurance Company of North America, its affiliates, and their employees and representatives do not give legal or tax advice. Customers are encouraged to consult with their own legal, tax, and financial professionals for specific advice or product recommendations.
Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.
Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.
Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. 800.950.1962.
Product and feature availability may vary by state and broker/dealer.
Brought to you by:
Allianz Life Insurance Company of North America
[End of on-screen disclosures]
1 Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.
2 The death benefit is generally income-tax-free when passed on to beneficiaries.
Allianz Life Insurance Company of North America does not provide financial planning services. Clients should consult with their legal and tax advisors to discuss their specific situation.FIUL requires qualification through health and financial underwriting.
Diversification does not ensure a profit or protect against loss.
FIUL is not a source for a guaranteed stream of income in retirement.
Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.
This notice does not apply in the state of New York.
Product P64339 is issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. 800.950.1962.
For financial professional use only – not for use with the public.
Product and feature availability may vary by state and broker/dealer.