Category: Life Insurance

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Joe Madden San Diego Insurance & Financial Specialist – IULs No Risk of Loss

Joe Madden San Diego Insurance & Financial Specialist, had a long career as a football coach in college and in the NFL. As most dynamic individuals, Coach Madden could not just sit and do nothing in retirement.  Mr. Madden has transformed into Financial Coach and a big booster of Index Universal Life.  The following is a reprint of the article that appeared in The Small Business Trendsetter on line magazine.  See that article here, http://smallbusinesstrendsetters.com/joe-madden-san-diego-insurance-and-financial-specialist-iuls-no-risk-of-loss/

Imagine a world where you could set money aside for retirement and not worry about losing any of it.

One of the best kept secrets in retirement planning today does just that. It’s called an IUL, Index Universal Life. The IUL is based on the stock market index of your choice, Standard & Poors or the Dow as examples. The IUL is based on whole life insurance, but instead of the cash values accruing at a given rate, those cash values are tied to the index you choose. If the value of the index goes up, you get paid. If the index goes below your purchase price, you do not lose.

As an example, your IUL let’s say the Cap is set at 15% and the Floor at zero. If the index gains 20% the insurance owner will profit 15% growth in the cash value. In the following year, the index games 8%, the gain will be 8%. The next year, if the index goes negative the insurance owner will not lose a dime. There is a floor of zero so there will not be a market loss.

Because the investment tool is Life Insurance, the gain is not taxable and the gain is compounded year after year. And, as Albert Einstein said, “compound interest is the eighth wonder of the world”.

The problem for the person planning for their retirement stems from misunderstandings of how Life Insurance works. Most people only consider life insurance as a death benefit to their heirs. They do not realize the many living benefits of a life insurance policy, compound interest being only one of many. Your tax attorney or your CPA can explain the tax advantages of Life Insurance.

Starting in the early 60’s people have been told “Buy term insurance and invest the rest.” Arthur L. Williams, professor of Insurance and Real Estate at Penn State University complete(d) a study regarding the fate of term insurance policies. Two of the facts discovered in this study are; less than 1 policy in 10 survives the period for which it was written and only 1% of all term insurance resulted in death claims. Professor Williams says, “the odds are 100 to 1 against term insurance ever paying a death claim.”

Another major problem with term insurance is the fact that term life insurance periodically your policy must be renewed which requires a physical you may not qualify due to a recent development in your health such as high blood pressure, high cholesterol etc. You may have already reached a point in your life where you can no longer afford the premium because your age prohibits you from purchasing life insurance.

Another major misunderstanding is Life Insurance provided by an employer. It is almost always term insurance and has no value in planning for retirement. Ed Slott, nationally recognized expert on retirement funding says,“People don’t think to save outside of work (for retirement)”

Read more from Ed Slott here: http://www.bankrate.com/finance/financial-literacy/ira-strategies-to-boost-savings-reduce-taxes-1.aspx#ixzz2whkhPvlP

Read more about Arthur L. Williams, professor of Insurance and Real Estate at Penn State University and the study on Term Life Insurance and the study about Term Life Insurance here:  www.evansfinancialgroup.com/Term_lifeInsurance.html

Joe Madden, San Diego Insurance & Financial Specialist, is a retired College and NFL Coach (with the San Diego Chargers 1989, on special teams) who now specializes in IULs. Mr. Madden can be contacted at his office, 312 Highland Ave., Ste. 200 in El Cajon, CA 92020 or by telephone, 619-230-8850