Which LIRP is Best For You?

David kicks off the conversation by laying out the 3 basic Life Insurance Retirement Plans (LIRP) and how you can find the best one for your particular situation.

For David, an LIRP is like marriage - it's a long-term commitment that you only ever consider if you're willing to keep it until death. 

If you are looking for absolute guarantees, David explains that no product compares to whole life insurance. The promise to pay a death benefit if the premium has been paid, plus the option of a very stable and safe savings plan, make it attractive for most investors. 

David points out that the potential to borrow money from a policy is one of the reasons some people buy whole life insurance.

However, whole life insurance has its drawbacks. For example, David reveals that unmonitored policy loans can derail your retirement plans or leave you with a significant income tax gain.

In the case of Variable Universal Life Insurance (VUL), David explains how the policy has investment subaccounts that allow the insurer to invest the cash value of a policy.

Although you may enjoy better-than-average returns with a VUL, your cash value can be significantly reduced due to poor performance of your investment options.

The thing that makes Indexed Universal Life Insurance (IUL) attractive is its ability to generate greater upside potential, flexibility, and tax-free gains.

However, David explains that the IUL is not designed to be a stock market replacement, nor can you experience the type of return you could get from a VUL. 

When it comes to ILRPs, David is convinced there is no one perfect solution because all three have distinct attributes. Your job is to find the best one for your situation while protecting yourself against potential downsides. 

 

 

Mentioned in this episode:

David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code

DavidMcKnight.com

PowerOfZero.com (free video series)

@mcknightandco on Twitter 

@davidcmcknight on Instagram

David McKnight on YouTube