Variable Universal Life Insurance for Tax-free Income

When it comes to purchasing a variable universal life insurance policy, there are definitely a few things to know before you buy.

VUL's are the riskiest form of Cash Value Life Insurance and can often be the most expensive product based on the net amount of risk that your policy takes on. With unlimited upside and unlimited downside, this product makes it extremely hard to generate a tax-free income stream for life.

In this video we will cover what VUL's are, how they should be used, and who they might be for.

Cash Value Life Insurance has been and will be one of the best ways to generate maximum tax-free income for life, but it takes the right design to get you there.

We specialize in creating policies that are designed for Maximum Cash Growth and Income.

Chapters:
00:00 Introduction
00:26 Recap of Series Videos
00:46 Discussing Variable Universal Life
02:06 Benefits of VUL
03:19 Who is a good fit for VUL?
03:58 Negatives to VUL
11:35 How to Use a VUL
13:57 Summary and Advice
15:45 Conclusion

[pablo]

Love the idea of a "hybrid" use of VUL when young, and IUL in later years!

[Untieabl]

Put 100k into a VUL at age 23 looking to do this exact same thing 20 years down the road for an early retirement.

[mahipayal]

Great video highly important in this inflation world

[ghostoferlock]

Great video. I think one of the best ways to help VUL accumulate is to look at the sub accounts and look for a daily interest fund, and deposit enough into it for insurance costs. Without the climbs and falls of the markets, there will be no buying high and selling low to pay for insurance costs. Figuring the percentage to go into a daily interest fund will show how much is remaining for investment in the other sub accounts. For example:
Daily interest 25 %
Nasdaq 20 %
US 5000 20 %
US 500 15 %
European 10 %
TSX 10 %
setting an ongoing deposit like this will help add units, not sell when values are lower, and pay for insurance. Of course this can't be going forward like this indefinately, but if a policy is purchased at a young enough age, this helps, as the increase in costs is so little. A policy can be maxed, and when prices are good, money can be transferred to the daily interest fund, just enough to pay insurance, and leave anything left invested. When there is substansial money in the policy, it's a matter of transferring some frome a sub account to the daily interest fund. Very simple to take $2, 500 and transfer it to daily interest to pay cost of insurance for a couple years, or longer.

[aks]

In IUL with 100k per year premium DB was around 1.4Mil and it was increasing every year till 14th year, where it was around 2Mil. why can’t we start with DB of 1.4Mil here? that should reduce the fees.

[alecfalkenberg]

I have been using a VUL policy that has built in IUL strategies that you can pivot to once you feel necessary. Have you looked at or used policies with both strategies built in? This eliminates the need to 1035 later on (but you still could), and keep it all in one place.

[pvb]

What's the name or type of policy you're moving it to? How many years beyond 20 will this keep paying?

[jdl]

What if my employer pays the fees for my company-provided, $1M death benefit GVUL? Does that make it a better option to add cash value. I already have a whole life policy for my low risk side. Thanks. Just started watching the videos. Well done stuff.

[timothythompson]

You will be much older in your 50s the cost of insurance is much higher. VULs have sub accounts s that can be switched out to much safer options like bonds. Switching to an IUL makes you give up that flexibility. What happens when the stock market starts going up again? This guy is just trying to get you to replace a VUL to an inferior IUL. This guy is trying to make replacement commission!!

[mikemaslanka]

Illustrations can be made to look however you wish the end result to be. First of all, does the owner have an insurance need?

Is the presenters’ 401k and IRA’s invested in securities? (Funds, ETF’s, etc.) Does that make them high flying too??? Lol. Dollar Cost Averaging into a high flying investment makes a lot of sense over the long term rather than doing the same in a IUL that doesn’t go down in value. Volatility works in the investors favor.

Who would try to sell a VUL to a 51 yr. old for retirement purposes? Then fund it for 7 years only and then add no more premium and then at age 65 begin tax free distributions? Of course the policy is going to fail.

How about runnng a proposal for a 35 year old and fund it with the maximum non mec premium until age 65 and then start taking tax free distributions. The asset allocation can always be changed according to the clients risk tolerance and time frame.


I could write more about this but I am tired….

[chas]

How do you rec the income for life? Thru policy loans? How ia it tax free? Are you withdrawing the dividend? Sorry for the dumb question, but I'm a new subscriber to your channel.

[conggao]

What is the second one? Single premium immediate IA? Thanks.

[TomK-nlih]

This is assuming you put a bulk payment correct? What if you are making monthly payments ??

[Avitedbirdie]

are you sure you can do a 1035 ex from VUL to whole because I tried to do this from my whole to VUL and they told me I could not

[TheNAVagator]

Hey, Thanks for the great video! Learned a lot. I have a question. When you say 1035 into a safer product, do you have specific examples of "safer products" that are non-volatile and not linked to the market?

[jsqu]

re: The hypothetical scenario of a market downtown in years 18 & 19: Is that as big of a problem in the earlier years? For example, market downtown in years 3 & 4, while actively contributing money every year. I am 52 and would love to take the next 7 years to aggressively fund, then switch to the IUL as you suggested. Is this not a great idea b/c of my age? And perhaps I should only go w/ an IUL?

[amalik]

what does 1035 mean? how do you 1035 into an iul?

[ashleytaylor]

Do you have any videos showing what would happen if an IUL had multiple negative years and you still have to pay fees. Yes you have a 0% floor but with the fees, won’t that eat away the cash value?

[aks]

If you get more than 5% illustrated net return, value of the policy and death benefit both should be more than what is illustrated, is it possible to have surrendered value more than the DB in that case and pay no fees?

[aks]

one more thing, can i pay the fees from the outside taxable account?