June 10

Index Universal Life Insurance For Military Retirees

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Can You Benefit from the New Life Insurance for Military Veterans?


When I first discovered Indexed Universal Life (IUL) insurance, I focused only on the features and benefits of the products themselves. It took me years to tie IUL together with the military transition problem. There’s honestly no better and more cost-effective solution for creating the most value, most wealth, most abundance, and most opportunity for any reason, at any time, than this tool — when it is properly structured. as an asset rather than a cost. In modern times, its time we finally rethink how to use life insurance for military retirees.  There's far more to the story than we've been told.  

One of the reasons that I like IUL so much is because it is called life insurance, not death insurance. There’s a living aspect to it. It’s based on the life of the income-producing entity. None of this is possible without the working individual who’s somehow creating human capital and value. 

Veterans protect their houses, their cars, why not protect themselves? They deserve to have access to the equity they have built in themselves — especially if they have people around them they want to continue to support or causes that they want to continue to fund, should they not be there to continue giving more of their human value. At that point, yes, there’s a death benefit involved. But the death benefit isn’t the purpose of this product, it’s a bonus for veterans and a way to keep their legacy going. If you are a veteran who wants more out of your post-military life than a 9-to-5 job and a long slog to retirement, you owe it to yourself to see how an IUL can help. 

With these products, you can diversify how you invest your money to accomplish all of your goals: for your life right now, for retirement when it comes, and to ensure you have a legacy to leave behind. A retirement fund is fine, but an IUL is another asset that can be accessed for your post-military goals that doesn’t count against you with taxes or require you to just use it for college or retirement. With an IUL, you can start a business, choose to retire early, or take a loan for your car rather than paying the bank an interest rate. 

IULs give veterans the ability to leverage the tax aspects that are offered, to secure money outside of a bank account, and to get better interest than they can get from a bank account because your policy is linked to the stock market returns. If the stock market goes up, you will be credited some of the interest, but if the stock market goes down, you don’t lose any money. Now, you’re not going to make crazy returns.

Given the volatility of the stock market, returns tend to be much less, but there is never a negative year. It’s an excellent place to put a portion of your assets as a way to save medium-term money — money that can be used in the near future. Within 10 to 20 years, you can create a nice nest egg that can really be leveraged for whatever reason you want.

With the IUL, you can tap into new ways of becoming financially secure so you can continue to serve in post-military life, but it’s not for everybody. It’s not for those who just want the absolute basic necessities, and who don’t want to think about how to do things like life insurance coverage while they’re in the military. That’s why SGLI is easy, relatively cheap, and standardized for everyone. But IUL might be a great tool to complement something like an SGLI for those who:

  • Don’t want to just to rely on the government
  • Won’t want to just rent insurance for as long as they need it until they can deal with it later
  • Don’t want to be limited by the amount of coverage they have 
  • DO want to save a little bit more money in a tax-advantaged vehicle with no risk that can be available for them to leverage at their transition — whenever that may be — to use for whatever reason they want

Our goal at US VetWealth is simply to make veterans aware that the IUL option is available. For the kind of person who is very comfortable with a safe and steady income for life, and who hopes that retirement will work the way it has for the generations before them, then, yes, saving for retirement and taking advantage of these tax-deferred retirement accounts, including Thrift Savings Plans, 401(k)s, and Roth IRAs are great.

But for those who have other goals, for those who want to be financially stable and secure, who want to maximize their opportunities at the end of a military career, but who intend to pursue a lifetime of service, then having only retirement accounts isn’t the best way to accomplish that goal, is it? This is where an IUL — with tax advantage growth, no rules on how to access it, no strict restrictions on how to fund it, and no risk if there is a stock market crash — can be a great place to put money to prepare for any opportunity that presents itself.

Life insurance is a powerful financial tool when used efficiently.  We want to help veterans be the kind of person who can maximize this opportunity. If you know the value, then you can choose how to leverage your money. It’s that simple. Contact us today to discuss how an IUL can provide value and open up more opportunities for you in your post-military life.

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About the author 

Scott R. Tucker

Scott R. Tucker is an author, speaker and the founder of US VetWealth, a lifestyle and financial consulting brand that helps US Military Retirees achieve more autonomy and work/life balance. He likes to say, "I help the 1% who serve our country become the 1% who influence It." A West Point graduate, serial world traveler, military financial expert, and entrepreneur, Scott brings valuable experience and insight to those who have sacrificed so much in service to our country.

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