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Index Universal Life

Indexed Universal Life: The "New Kind" of Life Insurance That Pays You to Live

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Most people think life insurance is simply a death benefit—a check that comes only after you are gone. That is the old way, whole life or term coverage.

We are introducing clients to the "New Kind" of Life Insurance (IUL). It isn’t just about leaving a legacy; it’s about leveraging a powerful financial tool that protects your family, builds tax-free wealth, and shields you from the volatility of the modern world.

The Power of the IUL: Your Financial Swiss Army Knife

• Protection for Your Loved Ones: Yes, it provides a tax-free death benefit to replace your income if the unthinkable happens.

• Living Benefits (The "Health Care" Safety Net): You don't have to die to use it! If you suffer a Critical, Chronic, or Terminal illness (like a heart attack, stroke, or cancer), you can access your death benefit while you are alive to pay for treatments, bills, or experimental procedures. It’s dignity and cash flow when you need it most.

• Zero-Loss Wealth Building: Your cash value grows linked to a market index (like the S&P 500), giving you upside potential. But the magic is the 0% Floor. If the market crashes, you lose nothing. Your gains are locked in.

• Tax-Free Lifetime Income: You can turn your cash value into a

• tax-free income stream for retirement—money the IRS can't touch.

"Step into the banker's seat with Awaken the Banker Within.

We teach you the secrets of the elite: Zero losses.

The power of compound interest. And the mastery of

leveraging Other People's Money.

It is time to win—for you, and for the ones you love."

 

Benefits

1. The Power of "Zero is Your Hero" (Ultimate Safety)

Your principal is protected by a guaranteed floor (usually 0%). When the stock market crashes or corrects, your account is credited 0% rather than taking a loss. You participate in the market's gains, but never its losses. This creates a "ratchet effect"—once your cash value grows, those gains are locked in and cannot be lost to market volatility.

 

2. Uninterrupted Compound Interest

This is the core of the "Banker's Position." When you access your money (via a policy loan), the full cash value inside the policy continues to earn interest as if the money never left. This allows your wealth to compound without interruption, even while you are using those same dollars for other investments or expenses.

3. Positive Arbitrage (Leverage)

Because your money continues to earn interest while you borrow against it, you have the opportunity for "positive arbitrage."

• Example: If your policy is earning 7% interest and you borrow against it at a 4% cost, you are effectively earning a positive spread on money you have already "spent" or deployed elsewhere. This is how the wealthy leverage their capital to do two things at once.

4. Tax-Advantaged Growth & Access

• Tax-Deferred Accumulation: Your cash value grows without being eroded by annual taxes, allowing it to compound faster.

• Tax-Free Access: You can access your cash value through properly structured policy loans without triggering income tax penalties, regardless of your age (no 59½ rule).

5. High-Growth Potential

Unlike traditional whole life policies with fixed lower rates, IULs allow you to link your interest credits to the performance of major market indices (like the S&P 500). This gives you the potential for double-digit returns in good years (up to a cap), maximizing your cash value accumulation.

6. Protection from Litigation

In many states (like Texas), the cash value within a life insurance policy is protected from creditors and lawsuits, adding an extra layer of security to your "private bank."

7. Living Benefits

While the primary focus is cash accumulation, the policy also provides "Living Benefits." If you become chronically, critically, or terminally ill, you can accelerate the death benefit to pay for your care or replace income, protecting your other assets from being drained.

 

The Creation of Indexed Universal Life

• Who: Transamerica Life Insurance Company is widely credited with introducing the very first Indexed Universal Life policy.

• When: The product was first released in 1997.

• Why: It was created to serve as a "middle ground" between traditional Universal Life (which offered safety but lower fixed returns) and Variable Universal Life (which offered higher potential returns but exposed the policyholder to direct market risk and losses). The goal was to provide the upside potential of the stock market (like the S&P 500) while guaranteeing a "floor" to protect the cash value from market crashes.

• It’s created with the focus on Living – though it comes with a death benefit and for most of Inner Bankers clients Living Benefits also.