We actively work with business owners, key employees and professionals to create advanced retirement plans, using Index Universal Life Insurance.

With an IUL they're not just getting life insurance—they're creating a steady stream of tax-free income with added living benefits while getting interest credited based off stock market gains. This method can be adapted on a smaller scale, but if you're considering an IUL for your retirement, be aware of the risks. The main risk is underfunding. To make an IUL work effectively, you need to overfund it, which is why these policies are usually only feasible for those with the financial means to support them.

Who uses life insurance in retirement planning?

Think Advisor analyzed a report from Newport Group that shows 73% of companies use permanent life insurance—like variable, whole, or universal life policies—to fund special retirement plans for key executives. They also noted 82% of companies use life insurance for supplemental retirement plans (SERPs) for executives. This shows that many companies rely on these insurance options to attract and keep top employees.

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How Universal Life Insurance Works

The premiums you pay are divided into two parts: one for the cost of insurance (COI) and the other for the cash value account. This cash value earns interest. Universal life insurance is appealing because of its flexibility. Unlike term and whole life insurance, which needs regular payments, universal life insurance allows you to adjust your premiums. If you stop paying, the policy’s cash value can cover future premiums. But this flexibility can be risky: if you don’t keep paying and the cash value runs out, the policy could end. To get the most out of these strategies, it's important to manage them consistently.

The Flexibility of Universal Life Insurance

Adjust Premiums: You can change your payments as needed.
Modify Death Benefits: You can alter the amount of death benefit.
Access Cash Value: You can take money out or borrow against the policy’s cash value.