In a well-diversified portfolio, each financial vehicle reflects different risk-and-return characteristics – so you can have the opportunity for growth, and still protect a portion of your assets.
And you may be surprised that life insurance can be a part of this financial strategy.
Cash value life insurance – such as fixed index universal life (FIUL) insurance – can help diversify your financial portfolio by offering protection, flexibility, and tax advantages.
And you may be surprised that life insurance can be a part of this financial strategy.
Cash value life insurance – such as fixed index universal life (FIUL) insurance – can help diversify your financial portfolio by offering protection, flexibility, and tax advantages.
FIUL provides protection
Death benefit protection
The death benefit from a life insurance policy – which is generally income-tax-free – can help your loved ones cover final expenses, such as funeral costs and medical bills.
Accumulation protection
Your accumulation value is protected, too, because it’s never exposed to market risk (although fees and charges will reduce the policy values).
FIUL offers flexibility
Flexible premium
FIUL policies give you the flexibility of paying premium when you want, and in the amount you choose.
Flexible access
You can use your policy’s potential accumulation value to help cover unexpected expenses – such as a health emergency – or even to help supplement your retirement income.
Three tax advantages of FIUL
Tax-deferred accumulation value
You don’t have to pay taxes on the interest your policy could earn as it builds. Over time, this could add up to even greater accumulation potential.
Income-tax-free loans and withdrawals
You can access any available cash value accumulation when you want and for any purpose – without income taxes.1 (But remember that policy loans reduce your benefit and cash value, and that loans or withdrawals could be taxable if your policy lapses.) FIUL policies include surrender charges or other early withdrawal penalties, which may result in a loss of principal if you surrender your policy prematurely. It’s important to manage your policy values carefully when taking loans to avoid a lapse.
Income-tax-free death benefit
Even if you never take a loan or withdrawal, you’ll still have the reassurance of an income-tax-free death benefit for your beneficiaries. This is one benefit only life insurance can provide.
Our video can help you better understand some of the challenges you may face in retirement – and show you how an FIUL policy can help address these common concerns.
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.
FIUL is subject to health and financial qualifications.
Diversification does not ensure a profit or protect against loss.
This content is general information for educational purposes, and is not intended to constitute fiduciary advice. Please consult your financial professional for a specific recommendation about purchasing this product.
This video is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that the issuing company, its affiliated companies, and their representatives and employees do not give legal or tax advice. You are encouraged to consults your tax advisor or attorney.
