Why EIUL? Real Estate Investment Strategy

Written By David Shafer

Last week we posted on the history of universal life insurance and why I like the indexed universal life product above all others. This week I want to answer the question why an EIUL would be a good addition to current strategies employed by the readers. In order to answer that question you, the reader need to answer the following questions:

OK, I admit it; the above questions were designed to make the idea of an EIUL seem like the best thing since the invention of fire! But, it is true that you can find no better place to protect your hard earned wealth from the tax man. And if you believe, as I do, that taxes have to go up in the near future to cover the deficit, then taxes should be at the forefront of your thinking. Real estate investors, by their very nature understand the importance of tax avoidance. So an EIUL should be a natural complement to real estate investing.

This is a life insurance product so it does protect from the threat of an early death. In all the early arguments between life insurance sales people and the equity [really mutual fund] industry this fact keeps getting left out. No doubt you can create a scenario where purchasing mutual funds inside a 401K will out perform an EIUL, but you have to assume a whole lot of good things happen, not the least a long life [also an unnaturally long bull market and low taxes]. I have yet to meet a widow that refused a large check from her husband’s life insurance policy!

EIULs are extremely liquid investments and since they don’t go down in bear markets, having access to cash in the policy comes in handy. How many people would have faired much better if over the last couple of years they could have lived off of cash inside an EIUL rather than sell their mutual funds or try to sell their real estate?

And of course, having complete control over how much and when you can access your cash value without having to pay income tax is a huge advantage for folks in retirement.

Well, there you have it. The next couple of weeks we will delve into how to fund an EIUL and talk about some of the negative points [all financial products have negative items associated with them]. I will give you examples of how much money can accumulate assuming the next 20 years is similar to the previous 20, and will answer any questions the readers might have.

Related posts:

1. Real Estate Investors: How EIUL’s May Fit Your Purposeful Plan For Retirement
2. What’s An Aggressive Real Estate Investment Strategy? According To Whom?
3. What Real Estate Investment Strategy Works In Slloooowly Appreciating Markets?
4. A Real Estate Investment Strategy For the Times
5. How Real Estate Investors Get It Done – Tax Strategy