Weekend Reading: Why Indexed Universal Life Insurance Might be New 401(k)

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
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Weekend Reading

In today’s economic climate, finding ways to outpace inflation is key. This is why investors are beginning to leverage indexed universal life insurance (IUL) policies, which are comparable to whole life insurance.


What is IUL? While whole life insurance policies have a fixed rate of about three to four percent, IUL policies can come with higher rates at about seven percent with no cap, depending on the stock market. Their ability to produce compounded interest is what makes them an investment contender worth considering during times of volatility and high inflation, especially when we have so much uncertainty on the economic horizon.

Consider this: Have you implemented strategies to help ensure your portfolio is more likely to outpace inflation over time? And, how soon do you need any savings that may have been lost thus far. While a 401(k) may take up to a decade to reap your returns back, alternate vehicles such as an IUL policy can help you recoup losses more quickly, and carry tax benefits.

Bottom line: While I don’t personally subscribe to IUL being the new 401(k), I do believe it is a valuable diversifier for your overall retirement strategy.