Introduction
No single insurance product can do everything. Indexed Universal Life (IUL) policies shine as a long‑term cash‑value vehicle, while term life with living benefits offers straightforward, budget‑minded protection. Together, they form a powerful “two‑pronged” strategy that addresses growth, retirement funding, and guaranteed family protection.
Why Pair IUL and Term Life?
- Dual Objectives:
– IUL: Accelerate cash accumulation for retirement and legacy planning.
– Term + Living Benefits: Provide income replacement and health‑event liquidity at minimal cost. - Cost Efficiency:
Term riders are inexpensive, allowing you to allocate more premium toward your IUL’s cash value. - Flexibility Across Life Stages:
Younger families can lean on term for protection and ramp up IUL funding as incomes rise.
Building Your Customized Strategy
- Calculate Your Income Needs
– Term death benefit: 10× your annual income to replace earning power.
– IUL death benefit: Supplemental legacy amount adjusted over time. - Budget Allocation
– Start with a level term premium that fits comfortably in your monthly budget.
– Direct remaining insurance budget toward maximum non‑MEC (Modified Endowment Contract) IUL funding. - Rider Selection
– Add critical illness or chronic illness riders on term.
– Consider an IUL indexed debit‑of‑premium waiver rider to keep the policy active if disability strikes. - Review Annually
– As salary grows, shift more funding into IUL to boost cash value without needing a new policy.
– Adjust term length if early retirement or mortgage payoff occurs.
Spotlight on an Immigrant Family’s Journey
The Ndjialo Family, immigrants from Cameroon, adopted this dual strategy: a 20‑year term policy with living benefits and an IUL maximized to non‑MEC guidelines. When Mr. Ndjialo suffered a serious illness in year 5, the term’s chronic illness rider paid out, covering medical bills. He resumed premiums, and his IUL continued growing—ultimately providing a tax‑free supplemental retirement income that let them retire debt‑free by age 60.
Action Plan: Your Next Steps
- Run a Combined Illustration: See how term and IUL interact over 10, 20, and 30 years.
- Set Milestones: Pinpoint when you’ll reallocate budget from term to IUL as your financial picture evolves.
- Consult a Specialist: Find an advisor who understands both products and can optimize the pairing for your unique family profile.
- Communicate with Loved Ones: Share your plan so everyone knows what to expect in case of emergencies.
Conclusion
By harnessing the growth potential of Indexed Universal Life alongside the lean protection of term life with living benefits, you can build a resilient plan that grows with you, protects your family, and ensures you never run out of money in retirement. Ready to craft your own dynamic duo?
Contact us for your personalized dual‑strategy plan today!
