Indexed Universal Life

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Indexed Plan - Information

An Indexed Plan is a well-established but not well-publicized financial vehicle that provides... 

  • High Returns.  Historical average 8%+ tax-free*.  (2.5% guaranteed minimum, compare to Bank account)
  • Guaranteed Safety.  Equity returns when market goes up, never lose if down.  (No negative returns)
  • Flexible Payments.  Examples assume level $5,000 annual.  (Pay more, less, or even $0)
  • Tax Advantages.  Grow & spend $$ tax-free* any time for any purpose.   (Not IRA, 401k, or 529 Plan)
  • Liquidity.  Withdraw, re-deposit $ - no cost, fees, tax or IRS reporting.  (Not 401k, Stocks, CD)
  • College Funding.  Pay expenses in safest, most flexible & reliable way.  (Not 529 Plan)   Indexed Plan vs 529
  • Death Benefit.  Forever & essentially free.  (Saving goals funded tax-free if pre-mature death)
  • Living Benefits.  Tax free* Long Term Care payments for Terminal, Chronic and Critical Illnesses.

*Tax-free assumes no intentional violations or policy cancellation. 

The plan allows you to safely save, grow & spend non-taxable dollars. You go up with the stock market, and your gains are locked in.  When the market goes down, you don't lose anything (no negative returns).

FamilyEliminating losses is a huge advantage.  If you have $100,000 and a 50% loss, it's now $50,000.  To get back even at $100,000, a 100% return is required. 

The Indexed Plan strategy of eliminating losses has consistently outperformed the market, earning close to 8% average (net of ALL expenses - with no market risk and tax free, penalty free access) over the last 20 years.  So the valuable Life insurance death benefit is essentially free. 

As Jack Bogle, founder of the Vanguard Group, said: "After nearly 50 years in this business, I do not know of anybody who has ever timed the market successfully and consistently.  Investors who try to outsmart the market more often get it wrong than right." 

Indexed Plans have stood the test of time, delivering attractive returns when the market is strong, and most importantly, delivering downside protection when the market falls. 

Sophisticated investors appreciate the many advantages, which may be why all major US Banks ($145+ Billion in account values) and Fortune 500 companies have similar plans.  With the best advice and alternatives, they save and access this tax-sheltered money.  US News & World called it "a super-charged retirement account with no cap on how much goes in yearly... the mechanism is nothing short of stunning".  (RWM specially designs big or small plans to maximize performance in the same way.) 

These plans combine a large tax-favored investment element wrapped by a small permanent death benefit.  Expenses are kept very low by a special design.  Just to match the liquid account values (this is historically the safest place for your money),  a taxable alternative must earn up to a 14% annual return (compare that to Bank other safe savings accounts around 1%). 

Illustrations - Learn More:
Indexed Plan Example by Age - Click Below:
Age 30
Age 35
Age 40
Age 45
Age 50
Age 55
Age 60
Age 65

** The illustration examples assume 7%, a lower crediting rate than the 10 to 30 year average over 8%.  Using options on the S&P 500 index, the maximum annual credit has a 10 to 15.5% cap with up to a 3% overall floor (guaranteed minimum).  This strategy historically outperforms the S&P 500 index over many time periods, sometimes dramatically.  Products from any carrier are available through RWM.

Smart Retirement Plan.  The Indexed Plan works as well as or better than qualified retirement plans (IRA, Roth, SEPP, 401k, Defined Benefit).   The costs are less while avoiding the contribution limits, income restrictions and never ending red tape (IRS annual reporting, administration, etc.).  With tax-free growth and income like a Roth, the performance and all the features are not available from any other financial alternative. 

Best College Funding.  An Indexed Plan is also an excellent, if not the best, way to fund for education.  Logically college comes before retirement and should be funded first.  This plan does both.  The advantages include:

· High yield funds are 100% available, even in down markets. 
       (Critical when tuition is due or expenses occur.)

· Funds can be used anytime for any purpose - available forever.  
       (Money can be spent and replenished.)

· Better college plan than highly regulated 529 qualified plans. 
       (No equity losses, no contribution limits, no spending restrictions, no tax on over-funding, and fully funded at death.) 

Children in the forest
Better Way to Save for College:  Indexed Plan vs 529 Plan, College Savings

Advantages - Indexed Plan.


  • Predictability and reduced volatility on policy assets 
  • Tax-advantaged growth
  • Tax-free income – now or in the future
  • Tax-free death benefit, including all account values

No matter when you retire, access money (any time for any purpose at no cost) without affecting your: 

  • Income tax bracket 
  • Capital gains 
  • Social Security benefits 
  • Medicare premiums 
  • Modified adjusted gross income 

Valuable Features.  (Not available from any other financial alternative)

A. Tax Sheltered (no taxes on either growth or income once the money is in).

B. Liquidity (tax-free access to savings at no cost, at any time, for any purpose).

C. Guarantees (no investment loss ever, up to 3% minimum annual credit overall, future years bonus interest).

D. Unlimited(choose almost any level contribution, payments can then be increased, decreased or skipped.)    

E. Make-Up OK(full make-up missed contributions from prior yrs, withdraw & re-deposit savings as needed).

F.  Death Benefit (permanent, not temporary like Term; benefits are income tax free & avoid probate). 

G. Living Benefits (Long-term care protection at no cost for Chronic and Terminal Illnesses - ask re Critical).

H. Disclosure (crediting rates, cost of insurance, and minor policy charges are transparent.)

I. Safety (creditor proof, historically the safest place on earth to put money).

J. Privacy (non-qualified means no IRS regs or reporting, not included in college aid qualifications.) 

Retirement Plans - Qualified & Non-Qualified

Legally avoiding taxation is the most favorable way to save and spend money.  Only two tax sheltered savings strategies remain -- Qualified Retirement Plans (QRPs) and Non-Qualified plans.  (QRPs are great and include IRA, Roth, SEPP, 401k.  Qualified means the tax advantages come with strict government restrictions, lifelong record keeping, and red tape.) 

The Indexed Plan is non-qualified, which is a good thing.  It has tax-free growth and income like a Roth IRA, but works better than QRPs.  It costs less, and does things QRPs do not allow and no other financial alternative can provide.

High Equity Returns, Fully Protected Against Market Losses.  Only available from the insurance industry, your money goes up with the market, never down.  (Any future savings goal self completes immediately if a death occurs.) 

Low Cost.  Typical QRP total annual plan charges exceed 1.0%+ of assets managed, while a NQIP averages 0.5%.  The small difference over time means the NQIP can accumulate hundreds of thousands more dollars.  (Subtracting costs that would be paid for Term insurance anyway, the net charge is a lot lower.) 

No Contribution Limits.  Arrange almost any flexible annual payment you want.  (Based on annual income, QRPs have strict contribution limits, withdrawal restrictions and required taxable distributions.) 

Liquid.  Cash available anytime, for any purpose, at no cost -- without selling assets.  Deposit, withdraw or replace funds as needed.  (College, emergency expenses, vacation, car, retirement income, etc.) 

Enhances QRP Income.  Provides a stable source of income that protects other qualified retirement savings when market conditions are volatile. 

...  (Ultimate safety, payment flexibility, full makeup if missed contributions, tax-free growth & spending, no IRS restrictions on: funding, access to money, or distributions.) 

Be Your Own Bank! 

An Indexed Plan lets you become your own, more efficient, bank.  Banks pay low (about 1%) taxable interest on your savings, and charge high (about 6-8%) non-deductible interest, plus fees, to borrow.  

This Plan reverses all that.  You earn a high non-taxable interest (about 8%) on your savings, and there is no charge (0%) to access/borrow money.

Established Concept

This type asset has increased in value during periods of economic boom and bust for more than 160 years.  A specially designed Indexed Plan utilizes the same well-established, conservative tax shelter long enjoyed by sophisticated and institutional investors.

US News & World calls these type plans a super-charged retirement account without any cap on how much goes in yearly… the mechanism is nothing short of stunning… for the fortunate few.  Fox Business says it may come very close to being the ideal contract. 

Better Than Term

Unlike Term, an Indexed Plan can provide lifetime protection.  It also takes full of the advantage of favorable tax laws to protect and accelerate cash growth, effectively changing an expense item into an asset.  The death benefit eventually refunds all payments -- plus a substantial tax-free profit.  Term works well, especially for those on a tight budget.  It is designed to be cheap by terminating before most claims are paid and wasting valuable tax benefits by not allowing account values.  (You can reduce the Term you have by the Indexed Plan death benefit, or just have extra coverage.) 

Enhance Income from Existing QRPs

The Indexed Plan is an excellent, if not the best, way to enhance the income from existing QRPs (Qualified Retirement Plans).  You will not have to settle for lower yield bonds and reduced income in later years.  It allows you to maintain high equity yields and guaranteed safety throughout retirement.  The advantages include:

  • High yields on funds never decimated by a down market. (Especially when income is needed.)
  • Funds can be used anytime for any purpose.  
    (Money can be spent & replaced as needed.) 
    (Avoids IRS annual contribution limits on QRPs like IRA, Roth, SEPP, 401k, Pension, etc.) 
  • No QRP income restrictions, requirements, penalties or taxation. 

Elderly couple

Accumulate Cash As You Age:   Wealth Protection Strategy in Retirement

Indexed Plan - Additional Resources

Accelerated Death Benefits

Understanding Indexed UL Client Brochure

Indexed Plan in Retirement Planning (Forbes, Jim Harbaugh)

16 Reasons Why Accountants Prefer Indexed UL to Mutual Funds

Wealth Protection Strategy in Retirement

Indexed Plan vs 529 Plan, College Savings

Indexed Plan Example by Age - Click Below:
Age 30
Age 35
Age 40
Age 45
Age 50
Age 55
Age 60
Age 65



Business people


In financial terms, an Indexed Plan provides portfolio diversification by using a proven asset class only available from the insurance industry.  It means never losing money, even when the market goes down, is a smart way to build wealth.  Avoiding taxes will supercharge growth and almost double spendable cash. 

It is passive, unlike active investments that require constant time, energy and expenses to maintain. 

The case is compelling to have this as an integral part of a balanced portfolio.  It will substantially increase income during retirement by allowing you to earn high-yield equity returns, avoid selling assets at a loss, and avoid low yield bonds. 

16 Reasons Why Accountants Prefer Indexed UL to Mutual Funds

Introduced in the 1970’s, the IRS realized in the 1980’s that Universal Life avoided taxation more than they first understood.  To minimize cost and maximize tax-free return in the 1970's, policies were funded with a huge premium equal to the death benefit that would grow and never be taxed.  So the IRS modified how quickly maximum premiums could be paid, allowing all the tax benefits to remain.  They established extremely generous contribution limits based upon the insured’s age and death benefit.  All prior contracts were fully grand-fathered.  Today’s policies are, and always have been, extremely attractive shelters.  US News & World Report refers to this as a super-charged retirement account without any cap on how much goes in yearly… the mechanism is nothing short of stunning.  Sophisticated investors have long been the largest purchasers, refuting irrational and biased positions opinions to avoid cash value Life insurance.  An estimated 85% of Fortune 500 companies have purchased policies, and major US Banks have over $145 Billion in Life insurance cash values (preferred over mutual funds, stocks and real estate) that provide high tax-sheltered returns, liquidity and the ultimate in safety.  Your Index Plan will use a specially designed product that provides the same performance and benefits. 

Links. Here are links about Indexed Life and Banks with cash value insurance. 

BOLI is Becoming an Increasingly Attractive Option for Banks

Cash Value Life Insurance: A Cornerstone Asset Of a Bank (pdf) 

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