Survivor Benefit

Play Video
Survivor Benefit
Each Roth IUL has a permanent “survivor benefit” that pays out a large lump sum to your beneficiaries upon your death. Additionally, if you were to become critically ill, you can accelerate your survivor benefit to use for time off work, in-home care, or in a facility, or to use for experimental treatment. Some people say it doubles as a long term care benefit. Using money that was targeted for the possibility of death, for something that you need when living, is termed “living benefits”.
Things Happen

If you were to die prematurely, before retirement, your plan can get derailed in a big way. The Survivor Benefit will help complete the plan, even if you were to die.

Here is how it works

When your plan first starts, a Survivor Benefit is established based on your contribution amounts and your overall goals. Your untimely premature death would mean the Survivor Benefit will be paid to your beneficiaries to provide them with the full financial benefit that would have been accumulated, had you lived. This money can be used to pay off a mortgage, put kids or grandkids through school, or whatever else is needed or desired by your survivors.

Your Survivor Benefit will established at the start of your account and can be increased if needed.

What you get

Accelerated survivor benefit

A person develops a terminal or severe disease

Their Survivor Benefit pays a portion of their benefit early

The person pays for medical bills or other expenses with the money

Their beneficiaries will get the remainder of the survivor benefit when they die

This works the same way as a Survivor Benefit, but it pays out even if you are still alive. If a qualifying event such as cancer, heart attack or stroke stops you in your tracks because you need to attend to your illness then you can accelerate your Survivor Benefit to pay extra bills, fill in because of lost income, or to use for special treatments, or additional help around the house.

The money paid in the acceleration will reduce the amount remaining in your Survivor Benefit but it might be the very reason why you can get by financially while you heal and get back on your feet.

Frequently Asked Questions

Have Any Questions?

There is no maximum amount, but you need to earn at least $50K in “household income” to apply.

Most (nearly all) retirement plans such as 457B’s, 401K’s, IRA’s, 403B’s…even Social Security, are “taxable” which means you are taxed at the prevailing (current) tax rate, as you receive the money. Just like as you work now and your wages are taxed, so are retirement accounts. Tax-free Roth IRA’s and Tax-free Roth IUL’s are free from taxes, meaning the money receive is net, after tax and is not reportable as income. This can save the average taxpayer as much as 20% to 25% each year on taxes.

Yes, you can have both and the limits from your Roth IRA do not affect how much you can put into your Roth IUL, and the reverse is true as well. 

Accounts that are “indexed” are not invested in the stock market, but instead only copy the gains of the stock market, but NOT the losses. You are protected against market downturns of any kind.

William Roth, the Senator from Delaware (1971 – 2001) who was the namesake of the Roth IRA, is the inspiration behind the Tax Free Roth IUL. Our agency, Life Legends adopted the name “Roth IUL” as a description of the tax-free aspect of the Roth IUL. If you click on this link (link to Roth IRA vs Roth IUL) for a full comparison. But, both allow you to remove money in retirement Tax-Free.

IUL is the abbreviation for Indexed Universal Life. When something is Indexed, it means that it follows a certain kind of strategy (S&P 500, or Bloomberg… or some other earning strategy) and it mirrors the activity of how it performs in the market. Universal Life is a permanent cash value life insurance plan that includes “living benefits” as well. It is through this component of the Roth IUL, that allows it be tax-free income.

Get in Touch

Have Any Questions?