Most people have a general idea about what life insurance is for. Usually, after you’re gone, the money from this policy goes to your loved ones or whomever you assign as your beneficiary. But, life insurance for retirement may offer additional benefits besides just the death benefit. An indexed universal life (IUL) policy is one way to potentially generate tax-deferred income. Some withdrawals from IULs may not be taxable at all, depending upon the situation. Also, some retirees may like the idea of keeping some of their money within the protection of a life insurance policy.

IULs may potentially offer a reasonable rate of return in terms of cash value, over time. Certainly, an IUL may have some benefits over simply keeping money in a regular savings account or a low interest rate certificate of deposit (CD). Also, whoever you leave your death benefit to may not need to pay taxes on the money they receive, depending upon the circumstances. Some cash values of current insurance policies, such as certain universal life, variable life, or whole life policies may have the possibility of converting into an IUL. Let us know if you’d like to learn more about this topic or about your current policies.