Few people realize that a life insurance policy can provide benefits besides paying out to your loved ones when you pass on, but 3 Dimensional Wealth Founder and CEO Doug Andrew knows the ins and outs of finance at a level that even fewer people can match.
The holistic finance expert specializes in helping families grow long-term wealth and enjoy true financial abundance. Doug has worked in high-level finance for nearly 50 years.
To him, the secret is all in what kind of life insurance policy you choose. Certain choices can work even harder for you than a traditional 401(k) or IRA account and provide more safety, liquidity, and predictability than you might think.
The choice recommended by Andrew is an Indexed Universal Life Insurance Policy (IUL). Andrew calls these favored policies ‘IUL LASER Funds’ and penned his latest financial book, titled The LASER Fund, about IULs and how to make them work for you.
The book, Andrew’s tenth, has helped thousands of families save millions of dollars and gain financial peace of mind through leveraging properly structured and maximum-funded Indexed Universal Life policies.
The CEO is both a Wall Street Journal and New York Times bestselling author. He also runs a popular YouTube finance channel and regularly hosts money-related radio programs. He sat down with Grit Daily to explain how a life insurance policy can help you prepare for late-life expenses in retirement.
Tax-Free Liquidity
If you’re familiar with 401(k)s and IRAs, you know that you usually have to pay a hefty penalty if you need to cash out your funds before 59 and a half. This keeps most people from accessing their funds — even if they really need them.
“Many traditional vehicles, like CDs, keep you from accessing your deposits for a certain amount of time. But with an IUL LASER Fund, you retain control of your funds — whenever you need them,” said Andrew.
He also noted that early withdrawals can be done tax-free in what’s called a loan. This loan, taken against your own deposits, does not even require repayment. Any remaining balance is automatically paid off when you pass from your death benefits.
Lower Volatility
Though traditional retirement funds are often touted as ‘safe,’ the truth is they are dependent on the market, meaning that your account balance fluctuates along with the market. But an IUL LASER Fund uses indexing, not an indexed fund, to participate in the market without your money actually in the market, providing protection for your principal from volatility.
“When the market goes up, you gain, thanks to indexing. When the market goes down, you don’t lose, thanks to your 0% guaranteed floor,” Andrew said.
Andrew also points out that most retirement funds are dependent on big banks. And if they fail, as they did in the 2008 market crash, you can lose the retirement savings that you diligently built up over the years. But IUL LASER Funds are held by insurance companies, which are much safer financiers that rarely fail.
Predictable Returns
The stock market is known for fluctuations, often taking the stress levels of investors for a ride as well. Andrew explains that an IUL LASER Fund offers more predictability and is great for long-term investors who want more surety of what their balance might look like in 20, 30, or 40 years.
“Most people don’t know that IUL policies earn interest based on index strategies,” Andrew explained. “These have usually averaged between 5% and 10%. In certain years and under certain conditions, IUL Laser Funds can earn 25% to 60%. The latest example of this happened in 2021.”
Surprising Tax Benefits
You may have wondered why affluent families always seem to hold multiple life insurance policies. It is because they know the secrets of how these policies can help them work toward comfortable retirements and generational wealth.
Here is what those families want: retirement money that is deposited and grows tax-free, tax-free access to that money at any time, and a tax-free transfer of an estate when a family member passes away. The only vehicle that provides that is an IUL LASER Fund.
Learning more about IUL LASER Funds, it’s easy to see that traditional retirement accounts may no longer be investors’ best bets. It may be time to learn more about the various financial options that can help you retire comfortably.
