5 Reasons Why an Indexed Universal Life Insurance Policy May Be Better Than a Roth IRA
An indexed universal life (IUL) insurance policy is a type of permanent life insurance that can provide a savings component in addition to death benefit protection. Here are a few reasons why an IUL may be a better choice than a Roth IRA for retirement savings:
Tax-Free Withdrawals: Withdrawals from an IUL policy are generally tax-free, while withdrawals from a Roth IRA are subject to taxes and penalties if taken before age 59 1/2. This means that an IUL can provide more flexibility and access to funds in retirement.
Higher Potential Earnings: IUL policies offer the potential for higher earnings, as the cash value of the policy can grow based on the performance of a market index, such as the S&P 500. This is different from a Roth IRA which is limited to the returns of the investments you choose.
Tax-Free Death Benefit: The death benefit of an IUL policy is generally tax-free, which can provide a significant financial benefit for your beneficiaries in the event of your passing. Roth IRAs do not have a death benefit.
No Age or Income Limits: There are no age or income limits for IUL policies, meaning anyone can take advantage of their benefits. Roth IRAs have income limits and age restrictions that may limit eligibility.
No Required Minimum Distributions: Unlike Roth IRA, IUL policies do not require minimum distributions during the lifetime of the policyholder. This means you can keep your savings in the policy as long as you like, rather than being forced to withdraw funds at a certain age