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A smarter way to use life insurance

Indexed Universal Life & Cash-Value Plans

IUL pairs lifelong protection with a cash-value account that can grow tax-deferred and be accessed tax-advantaged when structured correctly.


PLANNING WITH IUL

Where IUL can fit in a plan

IUL is not meant to replace everything you are already doing. It is one tool that can add tax-efficient growth, flexible access to cash, and a built-in legacy benefit.

Building long-term, tax-efficient savings

For people who are already saving consistently and want another bucket that can grow without yearly 1099s or required minimum distributions.

Needing flexible access later

IUL lets you access cash value through participating policy loans, giving you liquidity for major purchases or opportunities while the full balance continues compounding inside the policy.

Blending protection and legacy

Alongside the cash value, your family still receives an income-tax-free benefit, and modern contracts can include living benefit riders you may use while you are alive.

CORE BENEFITS OF IUL

Growth, access, and legacy.

The goal isn't just having a policy. It's building something you can actually use throughout your life.

Growth

Cash value earns interest linked to a market index, with a floor that protects against market losses.

Access

Participating policy loans let you use your cash value when needed while the full balance continues compounding inside the policy.

Legacy

Your beneficiaries receive an income-tax-free benefit, often far larger than total premiums paid over time.

HOW INDEXED CREDITING WORKS

How indexed growth and protection work

You are not investing directly in the stock market. The insurance company credits interest based on an index using caps or participation rates, while your cash value is protected from market losses.

Upside linked to an index. Interest is credited based on index performance, subject to caps or participation rates, without owning the underlying stocks.

Built-in downside protection. When the index is negative, the credited rate is typically 0 percent, not a loss, helping protect your cash value.

No annual taxes on growth. Cash value grows tax-deferred, and a properly structured policy can offer tax-advantaged access through policy loans.

TAX EFFICIENCY IN A PLAN

Why tax treatment can shape long-term results

Most people focus on gross returns, but how growth is taxed can matter just as much over time, especially for consistent savers.

Fully taxable account

Gross return: 8-9 percent per year

After-tax return: ~6-7 percent

Ongoing federal and state taxes can create an annual “drag” on growth.

Tax-advantaged bucket (like an IUL)

Gross return: 8-9 percent per year

After-tax drag each year: ~0 percent

Growth can accumulate tax-deferred, and properly structured policy loans can provide tax-advantaged access later.

Over long periods, that difference in annual tax drag can significantly affect the ending balance. An IUL can be one way to add a tax-advantaged bucket to your plan when it fits your goals and risk profile.

Smart planning isn't just about chasing returns. It's about how much you keep and how flexible those dollars are when you need them

LIVING BENEFITS

Protection you can use while you're alive

Many modern IUL contracts include living-benefit riders that allow you to access part of the death benefit early if you face certain health events.

  • Chronic illness — support for long-term care or medical needs when daily living becomes difficult.
  • Critical illness — such as certain cancers, heart attack, or stroke.
  • Terminal illness — when life expectancy is limited.

These benefits can help cover medical costs, home care, or income replacement — without forcing you to liquidate other investments at a bad time.

Interested in an IUL plan?

We'll walk you through how an IUL can support your long-term goals, growth, protection, and legacy with clear, thoughtful guidance.

Reach out directly anytime.

Brian Schafer

(619) 357-6823brian@sandiegoannuityshop.com

Smarter protection. Built for growth.™