Business Owners Get Indexed Universal Life Insurance To Enjoy Tax Advantages

Aug 2, 2023

Running a small business and looking for the right insurance policy and additional, tax-free source of funding? With indexed universal life insurance, you kill two birds with one stone! Find more about the benefits of this policy from Indexed Universal Life’s guide!

As a small business owner, you have a plethora of options when it comes to saving for retirement. Traditional retirement plans and IRAs are the most popular mechanisms for making tax-deferred contributions towards retirement, however, you will eventually have to pay the taxman once you start withdrawing money from your account during your golden years. With an indexed universal life insurance (IUL) policy, you can access your cash value tax-free at any age, creating a second source of non-taxable retirement income. What else could you ask for?

This is just one of the many benefits that IUL policies provide to business owners. If you want to delve deeper, read this guide by Indexed Universal Life!

In the guide, the IUL expert notes that while IUL policies are more commonly used by individuals and families to offset the impact of increasing tax rates and market fluctuations on their retirement savings, this type of insurance can also be suited to the needs of business owners, like yourself, to adequately address unexpected financial hurdles.

Find out more at What Is IUL

Indexed Universal Life says in the guide that among the many advantages of an IUL policy for business owners is its cash value growth potential. The policy provides you with an extra layer of stability since its cash value component grows on a tax-deferred basis, meaning you can accumulate a significant amount of funds until you decide to withdraw them.

The expert also highlights the risk-free nature of an IUL policy: "Due to IUL policy cash values having a “floor,” there is no downside risk to your principal in these plans - even if the underlying index that is being tracked suffers a substantial loss or experiences a high rate of volatility." As such, you can rest assured that your principal is generally protected as the interest rate linked to your account will never be less than the floor.

If you choose to go with this type of permanent life insurance, you can also borrow funds against the cash value accumulated in your policy to fund equipment purchases (and anything else your business needs!) at more favorable rates, which would allow you to meet your changing business requirements while optimizing efficiency and productivity.

An IUL policy can also serve as an instrument for financing the sale of a business when the worst happens, especially when a succession plan that ensures your business continuation has not been prepared. "With a buy-sell agreement, remaining partners or key individuals can use the funds from the IUL policy to purchase the insured’s portion of the company - essentially keeping the business running in the interim," the expert explains.

Read more about IUL's benefits at IUL vs Whole Life

If you are interested in buying an IUL policy, Indexed Universal Life advises you to communicate your needs with a licensed professional with expertise in this type of insurance. You can also use their website's search tool to find IUL experts that are available for consultation in your local area.

Indexed Universal Life also has a calculator to get a quick estimation of your monthly premiums and cash value accumulation.

Get a life insurance policy with permanent coverage and enjoy all its other benefits with expert guidance from Indexed Universal Life!

Visit IUL Calculator to find out more!

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