What is an IUL

What is an IUL

Indexed Universal Life Insurance

Most people are aware of the main function of life insurance: life insurance allows you to leave money behind for your beneficiaries once you pass away. But, what if we told you the right type of life insurance can be used as a source of income for you while you are still alive? Specifically, indexed universal life (IUL) insurance could be used for this purpose.

How Does Indexed Universal Life Insurance Work

An insurance company gives you a life insurance policy in exchange for the premium you pay. An IUL policy is typically “max-funded” meaning the total premium is paid upfront. Then, the insurance company agrees to keep your money protected. The policy is linked to an index, allowing it to gain interest. But, the money isn’t invested in the market. In fact, no matter what happens in the market, the money in your IUL will remain protected. This may allow for more confidence and certainty in retirement.

If you borrow against your cash value (the money kept in the IUL) you can use it as a source of tax-free* income. So, if you have money kept in retirement plan accounts and don’t want to dip into them yet, purchasing an IUL and taking money out of it instead may be a beneficial option for you.

IUL Benefits

An IUL offers a number of benefits to you if you choose to use it for retirement. These include:

Protection of your cash value
Potential for indexed interest
The possibility of “locking in” potential gains
No penalties for early withdrawal

Contact Info

What We Do

Grand Blanc Office

Bay City Office

*Proceeds from an insurance policy are generally income-tax-free, and if properly structured, may also be free from estate tax. Income-tax-free distributions are achieved by withdrawing to the cost basis (premiums paid), then using policy loans. Loans and withdrawals may generate an income tax liability, reduce available cash value, and reduce the death benefit, or cause the policy to lapse. This assumes the policy qualifies as life insurance and is not a modified endowment contract. The Host and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. This content is not intended to serve as the basis for any investment or purchasing decisions, nor does it recommend or involve the purchase, holding, or sale of a security. All figures herein are hypothetical and for illustrative purposes only to explain general concepts. No figure is to be relied upon as being accurate nor a guarantee or projection and is meant only as a partial overview of some relevant features and benefits of general insurance products that may be in the marketplace, and whose availability will be dependent on the State of residence of the consumer, and their individual suitability for the product they are wanting to purchase. Where insurance products are mentioned, any and all guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

IMPORTANT CONSUMER INFORMATION

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Investment advisory services are offered through Gibbs Wealth Management, LLC (DBA Compass Wealth Management), a SEC Registered Investment Advisor. Insurance products and services are offered through Compass Financial Associates. Gibbs Wealth Management, LLC (DBA Compass Wealth Management) and Compass Financial Associates are unaffiliated companies. By using this website, you accept our Terms of Use and Privacy Policy. GWM’s investment advisory services are available only to residents of the United States in jurisdictions where GWM is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings are for illustrative purposes only and are not investment recommendations. The content on this website does not constitute a complete description of GWM’s investment advisory services. Before investing, consider your investment objectives and Gibbs’ fees. Gibbs is not a bank or depository institution licensed in any jurisdiction. GWM and GFG are affiliated companies. Products offered by Gibbs are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

By contacting Matthew J. Balsbaugh/Compass Financial Associates LLC. Ins. Lic. #0118186 you may be offered information regarding the purchase of insurance products, including fixed index annuities and life.