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Pros and Cons of an IUL Account

Updated: Feb 8

A set of scales in balance

Contact Aaron at 844.711.1130 ext 1 to get started with your IUL account today.

What are the pros and cons of an IUL account?

Let's start with the PROS.

1) When creating generational wealth, Rule #1 -- Don't lose money. And fortunately, you don't lose money in an IUL. Your money can only grow. In years where the market index (i.e. S&P 500) shows increase, the value of your IUL will increase. But when the market goes down, an IUL policy is protected by a 0% floor. In other words, you can't lose money.

2) Your money has the potential to earn a high interest rate, generally higher than what you would receive through a standard bank savings account.

3) You may borrow money from the cash value of your IUL account to spend on whatever you want, usually at a lower interest rate than you would taking a loan from a bank. Then you can pay yourself back!

4). You can access funds from your cash value before hitting the official IRS legal retirement age (59.5 years old).

5) You may open multiple IUL accounts.

6) IUL accounts offer flexible premiums.

7) IULs can be used for retirement savings.

8) IULs can also be used for college fund savings

9) You can borrow money from the accumulated cash value of your IUL without penalty.

10) IULs can be used to give your children or grandchildren a financial head start in life.

11) IULs are often associated with the practice of Infinite Banking.

12) IULs offer flexible premiums.

13) You can contribute to IULs at any age.

14) You do not need a good credit score to open an IUL.

15) IULs have a life insurance component to them.

16) IULs allow post-tax contributions.

17) IUL distributions are generally tax-free.

18) IULs can be started by basically anyone whether you are a business owner, independent contractor, or an employee.

19) IULs do not get taxed on capital gains.

20) There are no income limitations to starting an IUL policy.

21) IULs are not invested directly in the stock market.

22) IULs are protected from market losses by a 0% floor.

23) Parents can start an IUL for their children.

24) Grandparents can start an IUL for their grandchildren.

25) Although the policy owner of an IUL must be 18 years of age, your kids can be the "insured."

26) IULs are set up by licensed life insurance professionals.

27) You can take loans or withdrawals from your IUL.

28) You do not have to pay your loan back on an IUL (but it is typically in your best interest to do so).

29) Opening an IUL account is creating a tax-free estate.

30) IULs are generally safe investments.

31) Unlike retirement plans such as IRAs or 401Ks, IULs don't require you to reach a certain age before withdrawing funds.

32) Unlike a 401K or certain IRAs, there is no contribution limit on an IUL policy.

33) IULs can be used to pass generational wealth to your family.


1) An IUL account has a higher monthly premium than a basic term life insurance policy.

2) An IUL account earns interest that mirrors the market index rate, not a guaranteed interest rate like a whole life policy. So, if you are a super conservative investor and prefer consistent predictability, an IUL offers higher upside than a whole life policy but does not promise the consistency of a whole life policy.


Pros and Cons of an IUL Account | Conclusion

The sooner you open an IUL account, the better because your money benefits from the compound interest principle. You have the ability to access your cash value at any time, making these great investment vehicles for young adults wanting to benefit from the higher interest rates they can earn on their money.

Learn more about how IULs work.

Contact Aaron at 844.711.1130 ext 1 to get started with your IUL account today.

To verify my license, visit the California State Department of Insurance website. Then, enter my California license number 4181215 into the box and click "SEARCH." You will see my ACTIVE license to help you with your IUL. So you can have 100% confidence in working with my company.


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