Power of Indexing

Indexing through an Indexed Universal Life Policy (IUL) provides the opportunity for tax-free compounding cash value growth with protection of principal against market volatility.

Wealth-Building with Indexing

Indexed Universal Life (IUL) policies allow your cash value to grow by tracking the performance of a stock market index. When the index, such as the S&P 500® grows, the policy cash value grows with a market growth cap. Conversely, when the market drops, the policy is credited with a 0% interest rate floor and does not experience a loss. However, monthly deductions, which include cost of insurance and other charges, may reduce the cash value of the policy.

Each policy year, indexing credits are “locked in” on which the subsequent year’s gains will be calculated. This means that IUL policies offer the potential for market gains without the risk of market losses. Cash values grow compounded tax-free and can be accessed tax-free through policy loans and/or withdrawals.1

This "Indexing" strategy has averaged 7.75% annually over the past 30 years all without the risk of principal loss. After taking into account insurance costs, the net IRR on cash value over a 40-year period is over 7% (assuming a preferred health rating).

Indexing Illustration – The Benefits of Downside Protection Using IUL

Below is a comparison of $100,000 invested this century in stocks reflected by the movement of the S&P 500® total return excluding dividends (red line) and the interest credited under an indexing method using the S&P 500® with a hypothetical cap of 12% and a floor of 0% (blue line).2 This comparison does not include any charges for the mortality costs of life insurance nor any stock investment fees, so the actual comparative values may vary from what is shown.

Source: Yahoo Finance GSPC Historical Prices, Wikipedia and StandardsandPoors.com
1 This historical performance of the S&P 500® is not intended as an indication of its future performance and is not guaranteed. This graph is only intended to demonstrate how the S&P 500®, excluding dividends, would be impacted by the hypothetical growth cap of 12% and the hypothetical floor of 0%, and is not a prediction of how any Indexed Universal Life Insurance product might have operated had it existed over the period depicted above. The actual historical growth of an IUL product existing over the period depicted above may have been higher or lower than assumed, and likely would have fluctuated subject to product guarantees. This illustration does not represent any specific product and does not reflect the costs of any optional riders or the effects of any withdrawals on policy values.

Indexed Universal Life insurance is not a direct investment in the stock market. It is an insurance product that provides death benefit protection. It provides the potential for interest to be credited based in part on the performance of specific indexes, without the risk of loss of premium due to market downturns or fluctuation. It may not be appropriate for everyone.

This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice to meet the particular needs of an individual’s situation. Please note, it is not possible to invest directly into the S&P 500® Index; this measure is provided solely as a benchmark of overall market performance.

Growth potential is an important consideration for your retirement assets. With the power of indexing, you can participate in the potential rise in the value of a stock market index while being protected from a potential drop in the index’s value.

The following are hypothetical examples provided for illustrative purposes only; they do not represent real-life scenarios and should not be construed as advice designed to meet the particular needs of an individual's situation. These examples do not represent any specific product.

Example 1: Male, Age 30

Chiropractor age 30, funds a CalChiro plan for 7 years with $12,000 a year, totaling $84,000. For $1,000 a month ($12,000 annually) the Chiropractor is able to grow his money in a tax-free compounding asset.

Assumptions

  • Male Chiropractor
  • Age 30
  • Income: $886,912
  • Total Contribution: $84,000 - ($12k a year)
  • 7-Year Funding

Total Benefit Age 90: $1,550,580

Income IRR: 6.23%

Total Benefit IRR: 6.80%

Income Years Age: 65-80

Example 2: Female, Age 35

Chiropractor age 35, funds a CalChiro plan for 7 years with $18,000 a year totally $126,000. For $1,500 a month ($18,000 annually), the Chiropractor is able to grow her money in a tax-free compounding asset.

Assumptions

  • Female Chiropractor
  • Age 35
  • Income: $979,768
  • Total Contribution: $126,000 - ($18k a year)
  • 7-Year Funding

Total Benefit Age 90: $1,726,034

Income IRR: 6.22%

Total Benefit IRR: 6.87%

Income Years Age: 65-80

Example 3: Male, Age 40

Chiropractor age 40, funds a CalChiro plan for 7 years with $24,000 a year, totaling $168,000. For $2,000 a month ($24,000 annually), the Chiropractor is able to grow his money in a tax-free compounding asset.

Assumptions

  • Male Chiropractor
  • Age 40
  • Income: $1,005,008
  • Total Contribution: $168,000
  • 7-Year Funding

Total Benefit Age 90: $1,781,132

Income IRR: 6.37%

Total Benefit IRR: 7.12%

Income Years Age: 65-80

Example 4: Female, Age 45

Chiropractor age 45, funds a CalChiro plan for 7 years with $24,000 a year, totally $168,000. For $2,000 a month ($24,000 annually), the Chiropractor is able to grow her money in a tax-free compounding asset.

Assumptions

  • Female Chiropractor
  • Age 45
  • Income: $707,904
  • Total Contribution: $168,000
  • 7-Year Funding

Total Benefit Age 90: $1,263,233

Income IRR: 6.18%

Total Benefit IRR: 7.10%

Income Years Age: 65-80

Example 5: Male, Age 50

Chiropractor age 50, funds a CalChiro plan for 7 years with $24,000 a year, totaling $168,000. For $2,000 a month ($24,000 annually), the Chiropractor is able to grow his money in a tax-free compounding asset.

Assumptions

  • Male Chiropractor
  • Age 50
  • Income: $733,696
  • Total Contribution: $168,000
  • 7-Year Funding

Total Benefit Age 90: $1,021,694

Income IRR: 6.34%

Total Benefit IRR: 7.02%

Income Years Age: 70-85

Example 6: Female, Age 55

Chiropractor age 55, funds a CalChiro plan for 7 years with $24,000 a year, totaling $168,000. For $2,000 a month ($24,000 annually), the Chiropractor is able to grow her money in a tax-free compounding asset.

Assumptions

  • Female Chiropractor
  • Age 55
  • Income: $509,216
  • Total Contribution: $168,000
  • 7-Year Funding

Total Benefit Age 90: $747,952

Income IRR: 6.01%

Total Benefit IRR: 7.02%

Income Years Age: 70-85

1 Policy loans and withdrawals will reduce available cash values and death benefits, and may cause the policy to lapse or affect any guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. Withdrawals or surrenders made during a surrender charge period may be subject to surrender charges.