Information on index universal life insurance for retirement

[Kevin Stearns]

Does anyone have any idea where to go to get set up with an IUL? Do you think using an IUL is a good part of a retirement strategy? Thank you for your input.

[Thomas Rutkowski]

@Kevin Stearns Any permanent life insurance product is a great part of your retirement strategy: IUL or Whole Life. Anybody who fully understands how these products work know that "buy term and invest the difference" is a myth. 

Make sure your IUL is overfunded. It needs to be funded right up to the MEC limit and solved for the lowest amount of death benefit for the premium you are paying. This will maximize your cash accumulation. 

1. Historically, the returns on cash value have outperformed the "average" mutual fund. I'd be happy to share my research showing this. 

2. Dollar for dollar, the cash value will provide 2-3 times the income in retirement than a 401k or IRA invested in traditional assets. And its tax-free.

But for real estate investors, the real magic is the fact that...

3. You can leverage your cash value to literally put your money to work in two places at one time. If your cash value is growing safely at ~7% and you can borrow against it at 4.4% (current rates), then anything you put that loan into that makes more than 4.4% is a return ON TOP OF the 7% your cash value is earning.

You'll need to find an insurance expert to make sure the policy is designed for the highest possible cash value and that it includes the ability to take a variable loan immediately. Not every product in the market allows for this.

This blog post explains the leverage strategy for real estate investors:

https://www.biggerpockets.com/blogs/7595/47651-are...

This blog post deals with all of the myths surrounding life insurance:

https://www.biggerpockets.com/blogs/7595/49878-are...

Good Luck!

Tom Rutkowsi