After reviewing a number of consumer brochures for Indexed Universal Life (IUL), here are some thoughts on appropriate life insurance products.
30’s, 40’s and 50’s
The most basic and inexpensive life insurance product is term. If you have children, make sure your death benefit figure is adequate to cover lost income and to provide for college. A sense of obligation and prudence directs many parents pick up a $250k, $500k , $750k or $1m term coverage. Really, 10 year term is not expensive.
It may be a great idea to start an Indexed UL, (IUL) for retirement planning, but one compelling strategy involves a minimum death benefit to maximize cash value. If you happen to get into killed in car wreck, die from cancer or whatever tragic early demise in your 30’s, 40’s or 50’s, the unspoken big question at the funeral will be, “How much did he leave?” or “she leave?” not, “How much cash value was in the policy?” What to cover both bases? Consider two life policies: a term to replace lost income, and a permanent for retirement and estate planning.
55 and over
It’s simple. Get a Guaranteed Universal Life, (GUL) also called No Lapse Universal Life. Lock in coverage a fixed premium to age 121. Put it on bank draft and let it run. Rock solid guarantee. It’s a competitive market, so premiums are favorable. Death Benefit starts at $25,000. The better quality GULs build a fair amount of cash value, and that may be used in your declining years to offset premiums.