Timothy Schucker breaks down Indexed Universal Life: structure the policy to minimize insurance costs so most of your $1,000 monthly payment builds cash value. With historical IUL growth around 7% and policy loans at 4-5%, you can borrow against the cash value and still come out ahead.
$1,000 per month.
Around 7%.
$20,000 loan.
Around 4% to 5% interest.
$1,000,000 versus $30,000,000.
Right now, my bread and butter is an IUL index, Universal Life, let's say Tim and Julian, you guys are putting in a thousand bucks a month into an iul. You have two buckets, you have your cost of insurance and you have your cash value, right? So if you took a thousand bucks and you could have, let's say a million dollar life insurance policy versus a 30 million, you would agree that a 30 million dollar life insurance policy would cost a lot more than a million. It's not about how much insurance can I get for a thousand, it's how little insurance can I get for a thousand bucks. That way, out of that thousand, only a portion of it is actually going to your cost of insurance. Most of it is going towards your cash bucket. Historically, an IUL will grow at around 7% even though you took out a $20,000 loan, which right now is a lot of it. People have it at 4 or 5% interest. If your account's still growing 7%, you're still making 2% even though you took the money out and you technically don't have to pay it back if you don't want to.
