Because IULs offer IRS approved tax-advantaged savings and are funded with after-tax dollars, taxes are paid on the “seed” rather than the “harvest” leaving people with more money when they retire.
Savings are secured by the issuing company. Insurance companies are required by law to have 100% or more, of all liabilities covered by the company’s assets. IULs are offered by some of the oldest, largest and most financially stable institutions in the world.
Good things are happening. The Wall Street Journal (June 5, 2010) said IULs are “This year’s hottest life-insurance product … well-suited to an era of sudden ‘flash crashes’ and overall uncertainty: it appeals to people eager to capture stock-market gains while avoiding undue risk.”
Savings can be accessed prior to age 59.5 without penalty and allow for tax-deferred accumulation as well a tax-free distribution option.
Death benefits are paid out to beneficiaries tax-free.
Account values are linked to indices such as Barclays and the S&P 500 index.
IULs offer an option to those who would like to save for the future without the risk – where their principle and interest gains are annually locked in and contractually protected against loss.