IUL

If you've already maxed out your 401(k) or IRA and you're wondering where the next dollar of retirement savings should go, an Indexed Universal Life (IUL) policy is worth a look.

An IUL is permanent life insurance where the policy's cash value growth is tied to the performance of a stock market index. That structure offers the potential for stronger returns than a fixed-rate policy, while a built-in minimum interest rate guarantee protects your cash value from market downturns — so a bad year in the market doesn't mean a bad year for your policy.

Who Tends to Be a Good Fit

• Maxed-out retirement accounts — you've already contributed the max to traditional tax-advantaged accounts and want another avenue for tax-deferred growth

• A stable financial situation — a steady income makes it easier to comfortably pay premiums over decades while the cash value builds

• A long-term horizon — IUL isn't a short-term play; the ideal client plans to hold the policy for 15+ years so the cash value has time to grow

If that sounds like where you are financially, let's talk through whether an IUL fits the rest of your plan.