What is the difference?
The stock market always reports returns as an average. Why? The stock market has average returns because they must account for negative years and divide by the number of years of the investment (hence average). A universal index policy has only real returns; It never has a negative return in any year. This is extremely powerful over time and will far outweigh any investment that has negative returns in just a short period of time. So, in reality, the “Actual Return” of a stock index would be much less than its “Average Return”. This is just another reason not to subject your retirement to anything. AVERAGE!
Also, an indexed universal life policy has something (a lot actually, but here are 2) that are critically important. First, an IUL has an annual BLOCK of returns from previous years and the second is a flat of between 0-3% depending on the policy / insurer. THIS IS A GREAT ADVANTAGE that no other policy offers!
Additional information on the universal life policies of the index:
“Would you rather pay taxes on the seed or the crop?” The seed, for sure !! I can buy the seed for $ 500 and I will earn $ 5,000 from the harvest. Would you rather pay taxes on $ 500 or $ 5,000? This being the case, why do so many people use qualified tax-deferred plan investments like 401k to save for retirement? The moment you contribute to a tax-deferred investment, you are under the control of the IRS and the rules of Uncle Sam; You can change them at any time! With Social Security bankrupt and the National Debt growing out of control, I’d bet taxes will be higher in 20-30 years. This is another reason not to use a tax-deferred investment to plan for your retirement. There is a better way and it’s called Indexed Universal Life Policy.
Indexed Universal Life Insurance (IUL) is a tax-free insurance policy that puts the owner in control of their retirement and not Uncle Sam. It is perfect for individuals and business owners and has more “living benefits” than the actual death benefit that is included. The absolute beauty of these plans is that they are not classified as “Qualified Plans” by the IRS, yet they are ideal for saving for retirement. An IUL is a cash value permanent life insurance product that is designed to outperform Whole Life, Universal Life and Variable Life without the catastrophic downside risk. In fact, IUL policies have zero downside risk! IUL policies are tied to major market indices like the S&P 500, but your money is never in the market. For example, if the market index returns negative 30%, your downside protection within the IUL policy will protect you from these losses. However, you benefit from positive market returns every year. This gives your investment the best of both worlds … all the positives with no downside risk! Indexed Universal Life policies are far more advantageous than any “Qualified Tax Deferred Plan” on the market! These policies are individually built for the specific individual; Contact Ginn Insurance for an illustration.