MEC Equity Indexed Life Insurance vs. Fixed Indexed Annuity
Comparing the EILI policy vs. FIA returns. What are the MEC Life Insurance Policy Advantages over the Fixed Indexed Annuities?
When planning for retirement and weighing the options of an FIA or an Equity Indexed Life Insurance policy, the EILI policy will often provide higher annual returns. This means that it will generate more money in retirement. Not only will the client benefit from increased income amounts, but the life insurance policy will also have a death benefit that is not found with an FIA. Life insurance policies that are MEC are a great way for any client to begin building wealth for retirement.
Based on the example client in the first section of the article, we now ask what the best option is for the client when he reaches the age of 66. We will first make the assumption that he will take 20 years to equally spend down assets equally. We will go on to assume that the FIA being offered will return 5.5% each year and the life insurance policy will have a return of 7.5%. You may already be asking why there is such a difference between the two returns. An FIA will usually have an upper limit on the amount that it can earn each year and that amount is between 7 and 9 percent of the stock index. The life insurance policy will also have an upper limite, but the amount is 12 to 16 percent, which is determined by the policy that is being used. The higher limits will indicate that the life insurance policy will also produce higher returns.
Fixed Indexed Annuity Returns vs. Equity Indexed Life Insurance Returns
Variable Loan with Equity Indexed Life Insurance
Equity Indexed Life Insurance (EILI) is a higher risk and have more expenses
MEC Life Insurance Policy Advantages
- Upon death, the death benefit of the insurance policy will not be taxed when it is passed to beneficiaries. Keep in mind it will still be subject to estate taxes unless an irrevocable trust is the owner of the policy. In the case of the example client, if he died at the age of 85, there would be a death benefit of $50,000 payable to heirs. This would not be the case if the client funded a FIA instead of the insurance policy.
- With the life insurance policy, the death benefit will exceed the value of the annuity. When the policy was purchased at 55, the death benefit was $270,000, which is already $170,000 more than what would be passed to heirs from an annuity.
Don’t just work with any life insurance agent.
Work with a licensed FIDUCIARY (what is a fiduciary?)
Work with a team that has perfected the strategy over thousands of successfully implemented premium financed life insurance plans.
Work with an expert that can show illustrations with maximum tax-free income and estate tax goals.
Work with an expert that can show ways to avoid the need for using your personal assets as additional collateral – Yes, there are designs that use just the cash value of policy.
Work with an expert that’s more interested in getting you in the BEST policy for you – not the best commission for him.
Work with a team that would rather under-promise and over-deliver
Work with a team that will stress-test your planning for scenarios that have never happened to make sure you’re secure.
Won’t waste your time Guarantee:
If we can’t address your goals and concerns better than the people you’re currently working with, we’ll send you $100.
Contact us now for no cost or obligation
No-obligation illustration to see if we can help you get the most out of your tax free income retirement planning