Tax-Free Supplemental Income!

Overview

Over the past several years, we have been a proponent of products that offer an opportunity for tax-free income. This has been a strategy used by affluent and financially aware Americans for many years. In fact, highly compensated executives abused this strategy so severely the government was forced to modify the rules.

The strategy is still valid and if structured correctly, will provide an individual with an income stream that will remain untaxed. The duration of that stream will be determined, in part, by the amount of money the individual contributes into the product and the duration of time before money is distributed.

What we are describing is a life insurance policy. “What” you say, “a life insurance policy? That will only benefit my survivors” Wrong! Emphatically and unequivocally wrong. It might be called a life insurance policy but in this instance, it’s a misnomer. In fact, one of the insurance carriers I represent (“A” rated and over 160 years old) calls it “Life Insurance You Don’t Have To Die To Use”.

What we are describing is an Indexed Universal Life policy. Sounds impressive and complicated right? It’s not. It is actually very simple. The policy is designed to maximize cash growth and minimize the death benefit so the cash value contained within the policy can accumulate.

How about an insurance policy that will pay you a monthly amount if you should develop an inability to perform two of your activities of daily living (ADL) such as eating, bathing, dressing, continence, toileting and transferring? What about a payment if you are diagnosed with a terminal illness, if you have a stroke or heart attack or even worse, develop a cognitive impairment?  

The next thing we see is that the money earned within the policy each year compounds. In other words, the interest earned in a given year earns interest in subsequent years. Also these policies have minimum guarantees over the life of the contract and are tied to a market index, like the S&P 500. When this index increases, your account value increases as well, up to an announced cap. When the index declines, your account freezes. Your account can’t lose value.    

Traditional universal life insurance offers a fixed interest rate option with a guaranteed minimum around 2-4% annually depending on the insurance company. The current interest rate for a traditional universal life policy will vary but can never be lower than the guaranteed minimum. An  indexed universal life policy has a fixed interest rate component as well as an indexed account option that offers the potential to earn higher rates of interest similar to equity market type returns.

The acquisition of this type of product is really a no-brainer for an individual concerned about his/her income in the future. There are so many third party endorsements of this strategy, it is hard to believe. Perhaps the best one is from a 35 year financial advisor, strategist and author, Douglas Andrew. Click the link below and let him describe the product benefits in his own special style.

http://www.youtube.com/watch?v=JSi5_qooDZw&feature=player_embedded 

Take action now to determine how much income you can receive in retirement. If you have any type of deferred compensation plan like a 401(k), 403(b), 457, IRA, etc., you can redirect those dollars into a totally safe growth vehicle that will yield tax free income.

If you are a business owner and don’t offer any type of pension or retirement plan, give your staff an opportunity to take advantage of a program that will benefit them and their families at no expense to you or your company. We offer a short power point presentation which describes the program and benefits you could receive. We can provide lunch or snacks with the presentation and take generally no more than 15 to 20 minutes of your time.  

Contact me for a no-obligation consultation. I will input your information into the insurance company software and you make the decision. If the above information has stirred your imagination but you are not quite ready to commit, purchase a copy of the N.Y. Times best seller “Tax-Free Retirement” by Patrick Kelly. If this book doesn't convince you of the value of this product, nothing will.

 (310) 251-5762