- Death benefit – The biggest plus is the death benefit provided to the policy owner’s beneficiary. Providing protection for the family so they can continue their lifestyle if the income earner were to die prematurely.
- Cash accumulation – the IUL provides the possibility of cash accumulation in the policy. The cash can be used at the owner’s choice. Tax-free if the simple rules are followed.
- Tax deferred growth - the growth of cash value in the policy is not taxed.
- No age requirement to access cash value. Unlike qualified plans that require you to be 59 ½ years old to access your money without penalty.
- No earned income requirement, and no maximum income limits.
- Does not affect taxation of social security benefits. Accessing the cash value does not normally count as income. If you’re receiving social security benefits, and also receiving income, at a certain level of income your benefits can become up to 85% taxable.
- No mandatory distribution required at age 70+.
- No probate! Death benefits are paid directly to beneficiaries and are not subject to income tax.
- Protection from lawsuits. In most states, the cash value is protected from creditors.