Posted on July 21st, 2024

Story by Joyce Grace

Hi everyone! Today, we're diving into a growing trend among professionals: the increasing preference for Indexed Universal Life (IUL) insurance as a retirement planning tool. As healthcare professionals and life insurance professionals/living benefits specialists for many years now, my husband and I have seen firsthand why IUL is becoming the go-to choice. Let’s explore why this is happening, backed by some solid facts and research.

1. Flexibility and Cash Accumulation

One of the key features of IUL insurance is its flexibility. Unlike traditional life insurance, IUL policies offer a cash accumulation component that grows over time. This is particularly appealing for healthcare professionals who seek a dual-purpose product: life insurance protection and a way to build cash value that can be accessed in retirement.

- Fact: IUL policies are tied to market indices, which means the cash value can grow based on the performance of the index, up to a cap. This allows for potentially higher growth compared to fixed universal life policies while still providing downside protection [[❞]](https://www.healthcareretirementplanner.com/2023/09/25/iul-retirement/) [[❞]](https://www.thinkadvisor.com/2023/12/01/indexed-products-rule-life-market-in-q3/).

2. Tax Advantages

Tax efficiency is a major consideration for anyone planning for retirement. IUL policies offer several tax benefits:

- The cash value growth is tax-deferred.
- Policyholders can borrow against the cash value tax-free.
- The death benefit is generally paid out tax-free to beneficiaries.

- Research Insight: According to a study by LIMRA, a research organization for the insurance industry, the tax advantages of IUL are a significant factor driving its popularity among high-income professionals, including those in healthcare [[❞]](https://www.healthcareretirementplanner.com/2023/09/25/iul-retirement/).

3. Protection Against Market Volatility

Healthcare professionals often have demanding jobs with little time to actively manage investments. IUL provides a level of protection against market volatility, offering a safer option compared to direct stock market investments.

- Fact: The cash value in IUL policies is not directly invested in the market but rather tied to the performance of a market index. This means there is a floor, typically guaranteeing that the policyholder won't lose money if the index performs poorly [[❞]](https://www.healthcareretirementplanner.com/2023/09/25/iul-retirement/) [[❞]](https://www.thinkadvisor.com/2023/12/01/indexed-products-rule-life-market-in-q3/).

4. Supplemental Retirement Income

Given the rising costs of retirement, having multiple income streams is crucial. IUL policies can serve as a supplemental source of retirement income.

- Research Insight: A survey by the American Medical Association found that many physicians are concerned about having enough money to retire comfortably. IULs can provide a TAX-FREE income stream via policy loans, which can be a valuable supplement to other retirement savings [[❞]](https://www.thinkadvisor.com/2023/12/01/indexed-products-rule-life-market-in-q3/).

5. Customizable Policies

IUL policies can be tailored to fit individual needs and financial goals. This customization includes adjusting premiums and death benefits over time, which is particularly beneficial for healthcare professionals with fluctuating incomes.

- Fact: The ability to increase or decrease premiums and death benefits as financial situations change is a significant advantage over more rigid traditional insurance products [[❞]](https://www.healthcareretirementplanner.com/2023/09/25/iul-retirement/).

6. Living Benefits

IUL policies often come with living benefits, providing coverage for critical injury, Alzheimer's, critical illness, chronic illness, and terminal illness. This added layer of protection is highly valuable for healthcare professionals who understand the importance of comprehensive health and financial security.

- Fact: Living benefits allow policyholders to access a portion of their death benefit while still alive if they face a qualifying condition, providing much-needed financial support during challenging times [[❞]](https://www.thinkadvisor.com/2023/12/01/indexed-products-rule-life-market-in-q3/).

7. Increasing Trend of IUL Policies

The popularity of IUL policies is on the rise. Between the third quarter of 2022 and the third quarter of 2023, sales of individual indexed universal life policies increased by 18%. IUL policies now account for 24% of all U.S. retail life sales premiums [[❞]](https://www.healthcareretirementplanner.com/2023/09/25/iul-retirement/) [[❞]](https://www.thinkadvisor.com/2023/12/01/indexed-products-rule-life-market-in-q3/). This trend highlights the growing appeal of IUL insurance for its combination of life insurance coverage and potential for cash accumulation.

In Summary

Professionals are increasingly turning to IUL insurance for its flexibility, tax advantages, market protection, potential for supplemental income, customization options, and living benefits. These features align well with the financial goals and needs of those in demanding careers, making IUL a compelling choice for retirement planning.

Thanks for reading! If you found this information helpful, don't forget to like, subscribe, and share. If you would like to know more about IUL with complete living benefits call us at 📲 (832) 885-2067 or email us at info@vandjlife.com. Until next time, stay informed and plan wisely!

References:

1. The National Association of Insurance Commissioners. “Indexed Universal Life Insurance.” [NAIC](https://content.naic.org/cipr-topics/indexed-universal-life-insurance).
2. Investopedia. “Indexed Universal Life Insurance (IUL).” [Investopedia](https://www.investopedia.com/terms/i/indexed-universal-life-insurance.asp).
3. LIMRA. “U.S. Life Insurance Sales Grow in First Quarter 2021.” [LIMRA](https://www.limra.com/en/newsroom/news-releases/2021/u.s.-life-insurance-sales-grow-in-first-quarter-2021/).
4. Forbes. “What Is Indexed Universal Life Insurance?” [Forbes](https://www.forbes.com/advisor/life-insurance/indexed-universal-life-insurance/).
5. American Medical Association. “Physician Financial Preparedness Survey.” [AMA](https://www.ama-assn.org/delivering-care/public-health/ama-survey-physician-financial-preparedness).
6. Insurance Information Institute. “Indexed Universal Life Insurance.” [III](https://www.iii.org/article/indexed-universal-life-insurance).
7. NerdWallet. “The Pros and Cons of Indexed Universal Life Insurance.” [NerdWallet](https://www.nerdwallet.com/article/insurance/indexed-universal-life-insurance).
8. ThinkAdvisor. “Indexed Products Rule Life Market in Q3.” [ThinkAdvisor](https://www.thinkadvisor.com/2023/12/01/indexed-products-rule-life-market-in-q3/).

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