• Berry Financial Group

A Life Insurance Policy That’s Better Than An IRA? Maybe.

Updated: Jul 30

Could a life insurance policy be better than an IRA? For some people, an Index Universal Life Insurance Policy (IUL) could a smarter investment strategy.


Before we go into some of the great benefits, lets first briefly explain the IUL.


What is an IUL? An IUL is a life insurance policy that also acts as an investment account that provides you with market-based growth opportunities with protection against down markets. In addition, there are fewer contribution limits like an IRA, and you can withdraw your money before retirement with ZERO penalty, and the money is TAX-FREE!


If you are considering opening an IRA or your company does not offer a retirement plan, an IUL could certainly be a smart strategy.


Here are some of the best reasons to consider an IUL:


Tax-Free Money Do you enjoy paying taxes? We’ve been helping people for more than 30 years and we’ve never come across someone who says they enjoy taxes.


Do you think taxes will increase? Think about all the money our government has spent recently to combat COVID-19. It’s so much money (in the trillions), we can’t even fathom what that much money looks like!


We hate to break this to you, but chances are you are going to be paying more in taxes in the future, but we can show you how to avoid paying taxes on distributions.


With an IUL, your policy’s cash value is tax free and when you go to withdraw funds, you can withdraw the money and not have to pay a cent to Uncle Sam!


Fewer Contribution Limits Unlike an IRA, you have more flexibility with how much you can contribute each year. As of 2020, the annual contribution limit for a traditional IRA was $6,000 - and $7,000 if you’re age 50 and older. An IUL provides you with the ability to contribute more money each year – that’s never a bad thing!


Growth Opportunity & Market Exposure With an IUL, you can devise your strategy to have market exposure and growth opportunity, but without the risk of a negative return. How is that possible?


Your money will be buying call options against the market index you and your advisor select but because you aren’t exposed directly in the stock market, you will only receive a portion of the market’s gain in exchange for the safety of zero negative returns.


Here is an easy example to understand: You have $1,000 and the market grows by 10%. You then get a portion (6%) and your cash value is now $1,060. Now, lets say the next year, the market drops by 20% like we’ve seen in 2020, your cash value remains at $1,060.


But, wait… you might be thinking, “How is a portion of the market’s growth better than the full market growth?” Well, let’s run that same example but without the security of eliminating a negative return.


You have $1,000 and the market grows by 10%. Your value is now $1,100. The next year, the market drops by 20%, your value is now $880.


Secret To Not Lose Money During Negative Market Years The secret to wealth building is two-fold in nature: don’t lose money and benefit from compound interest.


The IUL provides you with both!


Remember the example from above? With an IUL, you would have $1,060 after year 1 and $1,060 after year 2. Without the IUL, you would have $1,100 after year 1 and $880 after year 2.


The IUL is a slow and steady approach to investing – and remember – slow and steady ALWAYS wins the race.


Access To Money Before Retirement Another amazing benefit of the IUL is the ability to access your money with zero penalty, and you don’t need to re-pay your policy to make up the difference you took out.


Most policies require a period of time, typically 10 years, you have to wait before withdrawing money penalty free; however, if you do need access before that time you can withdraw, but you will have to pay a small fee.


Let’s look 15 years into the policy and assume you want to withdraw some money to help pay for a child’s wedding or college, you have that option!


Death Benefit IIt wouldn’t be life insurance without a death benefit, now would it? Along with all the awesome aspects of an IUL we have already mentioned, you also receive a death benefit to provide your family with security should you pass away.

Are you interested in learning more about the IUL? Do you have a child or grandchild that might benefit from such a strategy?


Click here or below to learn if this strategy could work for! Remember, there will never be a better day to start a life insurance investment strategy.



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BERRY FINANCIAL GROUP
MYRTLE BEACH, SC

4226 Mayfair Street 

Myrtle Beach, SC 29577

 

PHONE: 1.888.774.6181

FAX: 1.843.774.6191

NC DEPARTMENT OF INSURANCE
NCDOI Divisions, Services for Consumers, Company License Status: Berry Financial Group

Agent License Status: Richard Berry

SC DEPARTMENT OF INSURANCE
Agency Code: 142256
Individual: 154176

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Investment advisory and financial planning services are offered through Alphastar Capital Management LLC (“Alphastar”), a SEC registered investment adviser. Berry Financial Group and Alphastar Capital Management, LLC are separate and independent entities. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Berry Financial Group offers insurance products through individuals licensed to sell insurance. Comments regarding guaranteed returns or income streams refer only to fixed insurance products offered by Berry Financial Group and, unless specifically stated, do not refer in any way to securities or investment advisory products offered by Alphastar. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered or guaranteed by Alphastar.

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