The Hidden Costs of Waiting: Why Starting an IUL Early Pays Off

Why Timing Matters When Starting an IUL

Many people put off financial planning, thinking they have plenty of time to start later. However, when it comes to Indexed Universal Life (IUL) policies, waiting can cost you significantly. The earlier you start, the more benefits you gain—not just in cash value accumulation, but also in lower premiums and higher long-term returns.

The Power of Compounding Growth

IUL policies offer cash value growth linked to market indexes, and the longer your money has to grow, the more powerful compounding becomes. Waiting just a few years can result in dramatically lower cash value accumulation.

Example: Starting an IUL at Age 25 vs. 45

Let’s compare two individuals who start an IUL policy at different ages:

Age Started: 25 | Monthly Contribution: $300 | Cash Value at 65: $650,000

Age Started: 35 | Monthly Contribution: $300 | Cash Value at 65: $350,000

Age Started: 45 | Monthly Contribution: $300 | Cash Value at 65: $150,000

(Numbers are estimates based on average index returns; actual results may vary.)

As you can see, a 25-year-old contributing the same amount as a 45-year-old can accumulate over four times the cash value by retirement age. The earlier you start, the more time your policy has to grow.

Lower Premiums & Higher Death Benefits

Premium rates for life insurance are primarily based on age and health. Younger applicants generally qualify for lower premiums, allowing them to secure higher coverage at a more affordable rate. As you age, premiums increase, and health risks can impact insurability.

Example:

- A healthy 25-year-old may secure $500,000 in coverage for $50/month.

- A healthy 45-year-old may pay $150/month for the same coverage.

This difference in cost makes it more expensive to secure financial protection if you wait.

Greater Financial Flexibility in Retirement

Starting an IUL early means you will have more cash value to access in retirement. Policyholders can take tax-free loans against their cash value, providing a reliable stream of income without penalties or taxation like traditional retirement accounts.

Key Benefits:

- Tax-free income in retirement

- No early withdrawal penalties like 401(k)s

- Guaranteed death benefit for your beneficiaries

Conclusion: Don’t Wait to Secure Your Financial Future

Time is the most valuable asset when it comes to building wealth with an Indexed Universal Life policy. By starting early, you lock in lower premiums, maximize your cash value growth, and secure greater financial flexibility for your future. Don’t wait—take action today and start building wealth for tomorrow!

Ready to explore how an IUL can work for you? Contact us for a personalized consultation today!