Indexed Universal Life Insurance Case Study

Order ID: 47963
Order Type: 1500 Words
What is The Goal: Indexed Universal Life Insurance At Age 40
Word Count: 408
Life happens. Fast. One day you are making decisions on a career after high school and the next you are discussing a budget for the quickly approaching retirement years. Between a mortgage, a couple vehicles, and raising children, life insurance can easily be pushed to the side in order to spend money elsewhere. Before you know what happens, the big 40 comes around and it is time to look at things a little more closely. Several people even contemplate if there is even any point in life insurance at this age. People often assume that by this time, a really big investment would have to be made in order to receive any return.
With
In 2014, indexed universal life grew faster than any other product on the individual life insurance market. 52% of universal life premiums and 20% of all individual life insurance premiums were a result of indexed universal life insurance policies.
Similar to other forms of permanent insurance, indexed universal life insurance has many common uses. They are used for planning both college and retirement. They maximize annuity, build legacy, and can be a part of estate planning. Indexed universal life insurance policies are used for mortgage protection and maximizing a pension. They benefit from 1035 exchanges, assist with buy-sell agreements, and may serve as an executive bonus. These policies are not only used as a death benefit. The policies are also used to grow the policy holder’s investment portfolio. Because these policies have an annual reset design, the interest credits from each year are locked on the Index Crediting date, beginning a new starting date. None of the interest credits that have been earned can be taken away and they will continue to participate in any future growth. This will give a policy an advantage, allowing it to compound interest in the years to
I started doing some research. I talked to close friends and colleagues about what they were doing to prepare for this part of their own lives. I had heard of indexed universal life insurance from our agent, but had never put any thought or consideration into the benefits of a policy. After making a list of question, my wife and I scheduled an appointment to go over the facts and possibilities for ourselves. After looking at our finances, going over a budget, and crunching a lot of numbers, we reached the conclusion that an indexed universal life insurance policy was the best investment for our money.
We decided to start two policies, one for my wife, and one for myself. After learning that our investment could reach up to 7% a year, we decided to spend $5,500 annually on each policy. By age 65, my policy will have a death benefit totaling up to $236,959. The amount my wife will leave behind could total $233,586. Her policy could earn cash value of $149,439. My policy could reach the value of $109,593. I can earn up to $22,639 tax free income while hers will grow up to $22,668.
Neither of us would ever expect losing the other to be easy. But at least we can be assured that we will not leave one another burdened with the experience my sister in law was forced to