"Income Arbitrage" Explained

How to Build a Future Income Stream and Leave a Tax-free Legacy

Having enough money to live comfortably for the rest of their lives is the number one
concern of some seniors. And many also want to leave something significant to their
children and grandchildren. But with life expectancies going up each year, some investors
are fearful that they might have to sacrifice one goal for the other. There may, however,
be a solution with universal life insurance (UL). (Ability to pay is based on the claims-paying
capacity of the life insurance company. Fees, such as surrender and loan charges
will apply. Not government or FDIC insured.)

First, you loan money to a new or existing UL policy for a series of years. The amount
and the number of years required will depend on your age, health, and how much you
want to leave to your family. Thereafter, depending on the policy’s returns, you might not
have to contribute any additional money.

You would then be able to withdraw your contributions without paying any income tax
since it is considered a repayment of the loan you made earlier. Furthermore, the cash left
in the policy will continue to grow tax-free and could be taken out as a tax-free loan in
the future. The money will not have to be repaid until you die. It and any accrued interest
will be deducted from the death benefit which will pass income-tax free to your family.

The strategy can vary based on how many years you want to pay into the policy and the
end result you choose: either maximum possible income in the future or the highest death
benefit. Nevertheless, it is a unique method to provide retirement income and leave a
meaningful bequest to your family.

For a personalized illustration of how a life insurance policy can be built around your
individual needs, please contact us to schedule an appointment.

If you would like to meet either in person or by telephone (or simply want to receive a copy of my "Income Planning Guide"), please use the CONTACT US link and let me know.

I look forward to meeting you!