How an Index Universal Life Insurance (IUL) Policy Could Alleviate Financial Regrets

A nationwide survey released in May of 2019 reveals what most of us have long suspected: when it comes to our personal finances, most Americans are harboring a great deal of regret.

The Bankrate Financial Security Index Survey obtained the data via telephone interviews with a nationally representative sample of 1,000 adults living in the continental U.S. According to the data, three in four Americans (76%) admit they harbor financial regrets, particularly to do with savings.

Percentage of Respondents who say the following is their biggest regret:

  • Not saving for retirement early enough 27%
  • Not saving enough for emergency expenses 19%
  • Taking on too much credit card debt 16%
  • Taking on too much student loan debt 11%
  • Not saving enough for children’s educations 10%
  • Buying a bigger house than you could afford 7%
  • Something else 10%

Interestingly, younger generations reported having the most regret when it comes to not saving enough specifically for emergencies. Most of these individuals were Gen Xers or “Older Millennials”. Still, Millennials beat out Gen Xers when it came to a lack of regret. 18% of Millennials said they had no financial regrets, while only 11% of Gen X participants could say the same.

In this current climate of optimism and rising economic security, agents have a rare opportunity to help younger clients address the needs of their present while also planning to avoid financial regrets in the future. IULs offer one such solution.

Short Term IUL Benefits:

Robust Life Insurance: From the first day the policy goes into effect, some IULs work to provide security and value for their owners with a guaranteed death benefit payout upon the death of the policyholder* – a benefit that can help a surviving spouse or children cover funeral expenses, rent, food, clothing, tuition, and many of the other expenses that the policy holder’s income would have gone towards. If available, the addition of riders which can come with an additional charge, including long term care and critical illness, can make this protection even greater.

Long Term IUL Benefits:

Tax Benefits: IULs can offer several tax benefits, notably that the cash value of the policy accumulates tax-deferred while the death benefit is tax-free for beneficiaries. Loans made against the policy are also tax-free in many cases, providing a useful financial reserve in certain situations. Additionally, because premiums are paid with after-tax dollars, withdrawals (up to the amount of premiums paid) are tax-free as well.

Growth: IULs can offer the potential for steady cash value gains compared to other financial products while reducing losses due to market downturns. If the market loses value, the cash value holds steady. If the market performs well, the policy grows.  Additionally, the low cost of insurance and potential for growth associated with IULs can leave them a surprisingly affordable year-over-year option for even modest household budgets.

To learn more about IULs, including information regarding sales and marketing training at our comprehensive IUL ‘boot camp’ program, contact Simplicity Life at 800.921.3100

 

SOURCES:

Bankrate Financial Security Survey 2019, Bankrate

 

* Guarantees are backed by the financial strength and claims paying ability of the issuing company.

 

SLREGRET

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Disclaimer

The information contained herein is for general information purposes only. Simplicity Life is not to be held responsible for the accuracy of this information. Neither Simplicity Life nor its employees provide tax or legal advice. As with all matters of a tax or legal nature, your clients should consult their own tax or legal counsel for advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax adviser.

The information, statistics, and opinions reported herein are from sources believed to be reliable. However, Simplicity Life and the author of this blog do not guarantee the truth, accuracy, and reliability of any source, fact and/or statistic cited and no do necessarily agree with any opinions expressed by such sources.

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