EIULs-- Equity Indexed Universal Life Insurance

[Kyle K.]

I've heard some intriguing things about EIULs which are basically investment grade life insurance policies that can build up cash value for tax free use later in life.

Does anyone on here have an EIUL policy? If so, would you please explain your experiences with it?

If you have entertained the notion of getting an EIUL but concluded you'd be better without one, why did you come up with such a solution?

The thought of tax-free money from an EIUL combined with tax-sheltered real estate investment income sounds like a great recipe for a comfy retirement, but I'm not sold on the EIUL. Your take?

[Brian Gibbons]

@Kevin Yeats nice discussion.

BP I enjoy this thread re: permanent life insurance.

I would recommend folks read Investopedia

https://www.investopedia.com/terms/u/universallife...

https://www.investopedia.com/terms/t/traditionalwh...

buy term and invest the difference vs. permanent http://www.investmentnews.com/article/20150728/BLO...

Guardian Life has a IPF rider on their WL policy https://www.guardianlife.com/news/guardian-introdu...

"The IPF is an innovative rider that individuals and their financial advisors have been looking for during this low interest rate environment. It offers a unique opportunity for index-linked upside potential, while still supporting the robust guarantees that policyholders have come to expect with Whole Life. And best of all, clients can change their IPF allocations as their needs change, so they are never locked in"

Wealthy people have bought permanent life insurance for over 150 years for many reasons.

Here are 12:

The perfect retirement plan - 12 features

1. The plan should allow for tax-deferred growth

2. The plan should provide for income tax free withdrawls

3. The plan should earn competitive returns as much as possible but still have guarantees.

4. The plan should allow any taxpayer to put in as much money as they want.

5. The plan should provide a taxpayer to use the account as a collateral for a loan.

6. The plan should protect against market losses.

7. The plan should assure access to loans should the taxpayer need money before age 59 1/2.

8. The plan should allow for these loans to be paid at the taxpayers discretion, at any rate of repayment or even not paying them back at all.

9. The plan should be protected from creditors.

10. The plan should eliminate early withdrawal penalties, late withdrawal penalties, and excess contribution penalties —- there just shouldn’t be any penalties at all.

11. The government should continue the contributions to the plan at the same level the taxpayer was contributing if the taxpayers should become disabled and cannot continue to put money into the plan.

12. The government should accelerate the expected retirement account balance to the taxpayers family if the taxpayer dies prior to retirement

If you compare these characteristics of an ideal plan and compare it with a Roth IRA,

you can’t do number four, put in as much money as you want

you can’t do number five, use it as collateral for a loan

you get to number six, protect from market losses (see rider above)

you can’t do number seven, assure access to loans before 59 1/2

you can’t do number eight, allow for loans to be paid at the taxpayers discretion or not at all

you can’t do number nine, be protected from creditors

you can’t do number 10, eliminate early withdrawal penalties, late withdrawal penalties, and excess contribution penalties

you can’t do number 11, making the government continue the contributions to plan at the same level the taxpayer was contributing if the taxpayers should become disabled and cannot continue to put money into the plan

lastly, you cannot do number 12, the government should accelerate the expected retirement account balance to the taxpayers family if the taxpayer dies prior to retirement

Permanent life insurance is much better than a Roth IRA for these reasons.