Indexed universal life insurance for retirement

Here's why you should consider using Indexed Universal Life insurance as a retirement strategy:

Tax-Deferred Growth

The cash value inside an IUL grows tax-deferred, meaning you don’t pay taxes on gains each year. This allows your money to compound more efficiently over time — similar to a 401(k) or IRA, but with more flexibility.

Tax-Free Access in Retirement

You can borrow against or withdraw from your policy’s cash value tax-free, using it as a source of supplemental retirement income. Many retirees use this feature to bridge income gaps or reduce taxable withdrawals from other accounts.

Market-Linked Growth Without Market Losses

Your cash value earns interest tied to an equity index (like the S&P 500). When the market goes up, you gain interest; when it drops, your principal is protected by a guaranteed floor, shielding you from loss.

Lifetime Coverage and Flexibility

Unlike traditional retirement accounts, an IUL also provides a death benefit, ensuring your family receives a tax-free payout. You can also adjust premiums and coverage as your needs change over time.

Strategic Retirement Advantage

Because distributions from an IUL aren’t reported as taxable income, they can help you manage your tax bracket in retirement, avoid Social Security taxation, and reduce exposure to future tax increases.

CASE STUDY

How a Business Owner Built Retirement & Business Funding Using an IUL

Client Profile

David, 42, HVAC business owner

No retirement plan
Wants to expand business
Needs access to capital without relying on banks

The Challenge

David had inconsistent savings, high taxes, and no retirement structure. He wanted a plan that could:

Build long-term wealth
Provide tax-free retirement income
Give him access to cash for business expansion

The Solution: A Max-Funded IUL

We designed a high-cash-value Indexed Universal Life (IUL) policy with:

Maximum contributions
Minimum death benefit (to avoid MEC)
Strong index crediting strategies
Early liquidity for policy loans

This allowed David to use the policy as both a retirement plan and a private capital source.

The Results - 10 Years In (Age 52):

Contributions: $360,000
Estimated cash value: $410k–$460k
Available tax-free loan: Up to $360,000
Funds can be used for business expansion—no bank approval needed.

Retirement (Age 65):

Projected cash value: $1.2M–$1.6M
Tax-free income: $80k–$110k per year
Permanent death benefit for his family

Outcome

The IUL gave David:

A tax-free retirement strategy
A self-funded business expansion plan
Protection for his family
Market-protected growth
The ability to borrow from his own policy instead of banks

An IUL became his retirement plan, private bank, and long-term wealth strategy—all in one.