Let’s take a deeper look why IUL’s are replacing 401k’s.

Safety: With an IUL, ZERO is your HERO. Being Index’d on the S&P500 you have a floor of Zero and the luxury of the gains when the market goes up. 401k’s can take BRUTAL beatings and lose funds right before retirement.

Liquidity: With an IUL, you’ll be liquid within days. There are no penalties for accessing funds before age 59 1/2. (401k’s fined a 10% penalty for withdrawals prior to age 59 1/2 plus ordinary tax.)

Distribution: With an IUL, you can access the funds TAX FREE (via loan) or let the principal continue to grow at anytime. With a 401k there are Minimum Required Distribution requirements at age 72.

Predictability: With an IUL, you will index to the S&P500. The carrier that I prefer has no-cap on gains and has a floor of zero if the market goes negative, protecting your principal.

No Cap: 401K, there are limits on contributions and company match. With an IUL there is more flexibility with how much you can fund.

Tax Favored: 401k’s are tax-free now but you will pay higher taxes later. IUL’s are post-tax money that grows tax-free, distributes tax-free and transfers tax-free.

Living Benefits: Your IUL will give you Critical, Chronic and Terminal Illness benefits on day 1. You’ll be able to access the policy death benefit while living. 401k’s do not offer this option.

Death Benefits: On day 1 you will have a death benefit established. Talk about peace of mind knowing there is a plan in-place for your loved ones. With an IUL, your death benefit passes-on Tax-free unlike a 401k which is taxed. 401k’s do not offer this option.

Fee’s: An IUL is an insurance policy that offers living & death benefits once the first premium is paid. There is an annual fee to keep your insurance policy in-force. Your accumulated cash value will be able to cover this fee as your cash value grows. There are management fees with 401k’s of usually .05-2% for financial advisors to manage and invest your funds.