“IUL” Policies: Pros & Cons

Privatized Banking Pros & Cons

The Cons:

  • You do not have access to all of your money for multiple years and in some cases longer if you have substandard health or use tobacco.
  • You are buying life insurance so you have to qualify for the policy.
  • The amount of money available to you can fluctuate throughout the year based on the insurance company’s proprietary calculations, and what indexes are used.
  • If you access cash through a policy loan, you will have to consider the loan interest and the long-term effects on your cash value and death benefit.
  • Though you will have some flexibility, the premiums are payable for multiple years. There is a funding commitment to the policy.
  • If designed incorrectly there could be adverse tax consequences.

The Pros:

  • You have the potential of earning interest on the money you are otherwise going to spend.
  • You have a permanent death benefit that once paid for is owned by you or your estate.
  • Increasing Death Benefit.  As your cash value increases, so does your Death Benefit.  The effective death benefit will always be net of any outstanding loans.
  • You can earn 5-12+% on money otherwise sitting in the bank earning 0.0-0.75% interest.
  • You have the ability to become independent of banks.
  • Unlike a bank loan, you set the terms of the repayment of the loan.
  • If you are a business owner, you have the advantage of having the money in the policy earn interest while using a loan to invest in your business and earn money on the same dollar.
  • Protection against market crashes.
  • Having your money shielded from creditor demands, lawsuits, judgments, and liens?
  • Built-in tax-free retirement.

Are You A Candidate for Privatized Banking?



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