What Happens to Your IUL If You Live to Age 95?

You’re 65.

You retire.

Your IUL illustration shows a healthy policy and a retirement-income stream that looks great.

Then you flip forward 30 years.

You’re 95.

What does the policy look like now?

That’s one of the most important questions you can ask before using an indexed universal life policy for retirement income.

Because the real risk isn’t simply having a bad year.

It’s having a retirement strategy that looks great at 65 but wasn’t built to survive you living longer than expected.

The question isn’t:

“Does the policy work when I retire?”

It’s:

“What does this policy look like after I’ve been retired for 25 or 30 years?”

Age 95 Is a Stress Test, Not a Prediction

Nobody knows exactly how long they’re going to live.

That’s precisely why age 95 is useful.

We’re not predicting that you’ll live to 95.

We’re asking what happens if you do.

If you begin taking retirement income at 65 and live to 95, the strategy may need to support approximately:

30 years of retirement distributions.

If you retire at 60:

35 years.

If you retire at 70:

25 years.

Those are very different tests for the same policy.

The First Thing I Want to See at Age 95 Isn’t the Income

I want to see the policy.

Show me:

• Projected policy value
• Cash surrender value
• Outstanding policy indebtedness
• Applicable loan costs
• Annual policy charges
• Net death benefit
• The current retirement distribution
• Whether the policy is still projected in force

If somebody only shows you the retirement-income column, you’re missing most of the story.

Why Can Age 95 Look So Different From Age 65?

Because 30 years is a long time for small assumptions to compound.

During those years, you may have:

• Hundreds of thousands or even millions of dollars of cumulative retirement distributions
• Years of policy-loan activity
• Policy charges
• Increasing cost-of-insurance rates with attained age under applicable policy mechanics
• Strong indexed-crediting years
• Weak indexed-crediting years
• 0% indexed-crediting periods
• Changes in applicable loan rates
• Unexpected additional distributions

A policy can look very different after all of those forces have had decades to interact.

Let’s Start With the Retirement-Income Timeline

Suppose retirement income begins at age 65.

That’s why I don’t get overly excited by an illustration that looks fantastic at age 75.

Age 75 may only be one-third of the way through the retirement period you’re trying to prepare for.

Now Look at the Cumulative Income

Here’s a deliberately simplified example.

Suppose a model shows:

$100,000 per year.

Over 10 years, that represents:

$1,000,000 of cumulative distributions.

Over 20 years:

$2,000,000.

Over 30 years:

$3,000,000.

That’s simple arithmetic, not a policy projection.

But it shows why longevity changes the conversation.

The policy isn’t being asked to support one large distribution.

It’s being asked to support decades of them.

And That’s Before an Unexpected Expense

Maybe the plan shows $100,000 a year.

Then at age 78 you need another:

$150,000.

Home repairs.

Healthcare.

Helping family.

A major purchase.

Whatever the reason, the additional access changes the policy math.

If you take substantially more than originally modeled, rerun the projection.

Policy Loans Become Especially Important Over Long Retirements

Policy loans are often part of an IUL retirement-income strategy.

A policy loan creates indebtedness under the insurance contract.

That indebtedness carries an applicable loan cost.

And outstanding policy indebtedness generally reduces the net death benefit payable under the contract.

Over a few years, the loan picture may look manageable.

Over several decades, you need to watch it carefully.

Don’t Ask Only How Much Cash Value You Have

Ask:

“How much policy indebtedness do I have against it?”

Those two numbers need to be viewed together.

If policy values are growing while indebtedness remains manageable, that’s one picture.

If indebtedness is growing faster while policy values are under pressure, that’s a very different picture.

The IUL JUMP Strategy Starts That Loan Conversation During Accumulation

The IUL JUMP Strategy uses a Matching Indexed Participating Loan as part of the accumulation design we’re discussing.

Using the standard example, the client contributes:

$10,000 per year.

The first two policy years are funded with the client’s $10,000 annual contribution.

Beginning in Year 3, Matching Indexed Participating Loan activity begins under the modeled strategy.

The matching amount is created as a policy loan.

Those proceeds are immediately redeployed into the same policy as additional funding.

Here’s the Example Progression

The Client Is Not Contributing $60,000 in Year 11

The client’s out-of-pocket contribution in this example remains:

$10,000.

The additional:

$50,000

comes from Matching Indexed Participating Loan activity.

That $50,000 is not free money.

It is not a carrier contribution.

It is not a bonus.

It is policy-loan-funded money that creates policy indebtedness and carries an applicable loan cost.

Why Does That Matter at Age 95?

Because if we’re evaluating the benefit created by loan-funded policy value during accumulation, we also have to carry the loan side of the equation through the model.

You don’t get to count the extra policy funding and pretend the associated indebtedness disappeared.

That’s especially important when you’re looking decades into retirement.

The Current Applicable Loan Rate Is 5%

With the policy structure currently used for the IUL JUMP Strategy, the applicable loan rate is currently:

5%.

The applicable loan feature has a contractual maximum loan rate of:

6%.

If you’re evaluating the policy through age 95, I want to see both.

Show me the projection using the current applicable 5% rate.

Then stress-test it at the contractual maximum 6% rate.

Why Can One Percentage Point Matter So Much?

Because we’re not talking about one year.

We’re talking about potentially decades of policy economics.

A change in applicable loan cost can affect the long-term relationship between policy values and indebtedness.

That becomes more important when substantial retirement distributions are also being accessed.

Positive Arbitrage Can Help the JUMP Math

Suppose the applicable indexed-crediting result is:

8%.

And the applicable policy-loan cost is:

5%.

The simplified relationship is:

8% – 5% = a favorable 3-percentage-point difference.

That favorable relationship can help the economics associated with participating-loan funding.

But it doesn’t mean the entire policy earned 3% net.

And positive arbitrage is not guaranteed.

Now Run the Opposite Scenario

Suppose the applicable indexed-crediting result is:

3%.

And the applicable loan cost is:

5%.

The simplified relationship becomes:

3% – 5% = an unfavorable 2-percentage-point difference.

Now add retirement distributions.

Add policy charges.

Then repeat weaker conditions for multiple years.

That’s a much harder test.

What Happens in a 0% Indexed-Crediting Year?

At a 0% indexed-crediting result and a 5% applicable loan cost, the simplified relationship is:

0% – 5% = an unfavorable 5-percentage-point difference.

Again, that doesn’t mean the entire policy loses 5%.

But it tells you the loan economics are unfavorable in that simplified example.

The 0% Floor Doesn’t Stop Every Other Policy Expense

The indexed-crediting floor applies to the applicable indexed-crediting calculation.

It does not necessarily prevent overall policy value from declining.

Cost of insurance can continue.

Administrative charges can continue.

Applicable rider charges can continue.

Loan costs can continue.

Retirement distributions can continue.

That’s why several 0% years can matter so much in a long retirement.

Don’t Test One 0% Year. Test Several.

If I’m evaluating a policy through age 95, I don’t want a stress test that gives the strategy one mildly inconvenient year and then returns everything to normal.

Give it several difficult years.

Especially during retirement.

Then see what happens to the policy.

The Order of the Years Matters Too

Weak results early in retirement can create a different path than weak results much later.

Why?

Because retirement distributions are already coming out while the policy is experiencing those results.

The policy may then enter later years from a different starting position.

That’s why I don’t want to see only an average rate.

I want to see what happens when the timing is ugly.

Age-95 Planning Is Where Average-Rate Thinking Can Get Dangerous

An average can hide a lot.

Imagine two 20-year sequences with the same average indexed-crediting result.

One has stronger years early.

The other has several weak years right after retirement.

The average may look similar.

The retirement experience may not.

That’s why the sequence should be stress-tested.

What About the Historical 6.87% Number Used in the JUMP Analysis?

One historical analysis used in our JUMP modeling examined annual S&P 500 price changes from 2006 through 2020.

Dividends were excluded because the policy is not directly invested in the S&P 500.

The example applied the strategy’s:

10% cap

and:

0% indexed-crediting floor.

Negative annual index price changes were replaced by 0% for purposes of the historical indexed-crediting calculation.

Positive annual changes above 10% were capped at 10%.

The resulting annual capped-and-floored figures averaged approximately:

6.87%.

Then the Model Compared 6.87% With the Current 5% Applicable Loan Rate

The simplified modeled relationship was:

6.87% – 5.00% = 1.87 percentage points.

That 1.87-percentage-point positive spread was part of the assumptions used in the JUMP modeling.

But it is not guaranteed to repeat.

And it should not be blindly carried through a 30-year retirement projection as if every year will cooperate.

What About the 14% to 17% Numbers?

Under assumptions used in one JUMP model, the combination of the base indexed-crediting assumption and the modeled positive-arbitrage effect attributed to successive Matching Indexed Participating Loans produced modeled effective results reaching approximately:

• 8.74% at the Year 3 JUMP
• 11.61% at the Year 5 JUMP
• 14.48% at the Year 7 JUMP
• 17.35% at the Year 9 JUMP

Those figures are not S&P 500 returns.

They are not IUL indexed-crediting rates.

They are not guaranteed policy returns.

They are modeled effective results under the assumptions used in that analysis, before accounting for applicable policy charges and other factors.

Age 95 is exactly why those distinctions matter.

You Can’t Retire on a Presentation Percentage

You retire on dollars.

And the policy has to remain capable of supporting those dollars.

So rather than saying:

“Look, the model reaches 17.35%.”

I’d rather ask:

“Show me the actual policy values, loans, charges, income and death benefit at age 95.”

Cost of Insurance Deserves Extra Attention at Older Ages

Under an IUL contract, applicable cost-of-insurance rates can increase as the insured reaches older attained ages.

The actual dollar charge also reflects the applicable policy structure, including factors such as the net amount at risk.

That’s why simply saying:

“The policy had low costs when I bought it”

doesn’t answer the age-95 question.

Show the actual projected charges later in life.

The Death-Benefit Structure Matters Too

An IUL is still life insurance.

Death benefit and policy values interact with the policy’s insurance costs and funding design.

The policy should be designed around the client’s objectives, funding, applicable tax rules and insurance needs.

Then the later-year economics should be examined.

Future JUMPs Are Another Assumption to Test

In our example, planned JUMPs occur in policy Years:

3, 5, 7, 9 and 11.

Each planned future JUMP requires new underwriting and approval for the applicable death-benefit increase.

Future JUMPs are not guaranteed at initial issue.

Health can affect approval.

Income and employment can affect approval.

Existing insurance can affect approval.

Driving history can affect approval.

Occupation, hazardous job duties and risky hobbies can affect approval.

What If You Don’t Qualify for the Next JUMP?

Under the strategy mechanics we’re discussing, a missed JUMP can pause the progression rather than automatically resetting the strategy.

If you’ve already achieved a particular matching-loan level, not qualifying for the next planned JUMP does not automatically erase the previously achieved level under the mechanics described.

You may be able to reapply at a later policy anniversary if your situation improves, subject to actual policy rules and approval.

But the retirement projection should be updated.

Run the Age-95 Projection With No More JUMPs

If you’re early in the strategy and your original model assumes future JUMPs, create another version.

Remove every future JUMP that hasn’t already been approved.

Then run the policy to 95.

What happens?

Does the retirement-income target still work?

Does it need to be reduced?

How much policy value remains?

What’s the outstanding indebtedness?

What’s the net death benefit?

That’s a useful stress test.

What If You’re Taking Around 12% in the Retirement Model?

Under modeling used with the IUL JUMP Strategy, we’ve evaluated retirement distributions at approximately 12% per year of policy/account value under specific assumptions.

That does not mean 12% is a universal safe withdrawal rate.

It isn’t.

And age 95 is one of the best places to test whether an aggressive modeled distribution level holds together.

Run 12%, Then 10%, Then 8%

Suppose a hypothetical $1 million value is being used to illustrate the initial distribution.

Those are simple calculations, not statements about what an actual policy can sustain.

Now run each distribution path through age 95.

Compare what remains.

What Happens If You Reduce Income After a Weak Year?

That’s another test worth running.

Suppose the plan calls for $120,000.

Then the policy has a difficult period.

What happens if you temporarily reduce the distribution?

Does policy durability improve materially?

How much income do you give up?

How much later-life margin do you gain?

Those are decisions you can model instead of guessing.

What If You Never Reduce the Income?

Run that too.

Keep the planned distribution coming out regardless of weaker crediting.

Use the higher applicable loan-rate assumption.

Keep the policy charges.

Extend the model through age 95.

See what survives.

The Policy Shouldn’t Be on Autopilot for 30 Years

If you use an IUL for retirement income, monitor it.

Review the current policy values.

Review the current loan balance.

Review the applicable loan rate.

Review the projected charges.

Review the net death benefit.

Review the planned distributions.

Then update the projection.

What Happens to the Death Benefit by Age 95?

That can vary substantially based on the actual policy.

Outstanding policy indebtedness generally reduces the net death benefit payable under the contract.

So if you’ve used the policy heavily for retirement income, don’t assume the original gross death-benefit number is what your beneficiaries will receive.

Look at the projected net death benefit after indebtedness.

That Creates a Real Retirement vs. Legacy Decision

Maybe your priority is:

“I built this money to use while I’m alive.”

Someone else may say:

“I want income, but leaving a meaningful death benefit to my children is important too.”

Neither objective should be hidden.

Run the policy around the actual priority.

What About Taxes at Age 95?

Policy values from a properly structured and maintained non-MEC life insurance policy may potentially be accessed through withdrawals to basis and policy loans without current income taxation under current federal rules, subject to applicable requirements.

But this is where maintaining the policy becomes especially important.

A policy that lapses or is surrendered with gain and outstanding indebtedness may create taxable income under applicable tax rules.

Imagine Discovering That Problem in Your 90s

That’s the scenario I want to work hard to avoid.

You’ve been retired for decades.

You have substantial policy indebtedness.

Your financial flexibility may be lower than it was at 65.

Then you discover the policy is under pressure.

That’s why the age-95 test belongs at the beginning of the planning process.

Now Put the Up-to-300% Number Through the Age-95 Test

In certain modeled comparisons we’ve evaluated, the IUL JUMP Strategy has produced up to approximately 300% more projected retirement income than the 401(k), Traditional IRA, or comparable tax-deferred retirement strategy being evaluated.

That is a modeled retirement-income comparison.

It is not 300% more return.

It is not a guaranteed result.

And it should not end the conversation.

If the JUMP Strategy Shows More Income, Show Me Age 95

That’s where the comparison gets interesting.

How much cumulative income did each modeled strategy provide?

What taxes were assumed?

What market or indexed-crediting assumptions were used?

What policy-loan assumptions were used?

What happened during weak years?

What values remain at age 95?

What legacy remains?

That’s the comparison I want.

Why Can the Modeled Difference Be So Large?

Several mechanics can affect the comparison:

• Matching Indexed Participating Loan funding
• Redeployment of policy-loan proceeds
• Indexed-crediting assumptions
• Positive and negative loan arbitrage
• Applicable policy-loan rates
• Policy charges
• Retirement distribution structure
• Tax treatment
• Market and sequence exposure in the compared strategy
• Longevity

That’s why the 300% number needs to be explained, not merely advertised.

The 300% Isn’t the Sales Pitch. It’s the Question.

Don’t just believe the number.

Ask:

“Show me exactly where the difference comes from.”

Then ask:

“Does that difference still hold up if I live to 95?”

What About Approximately 40% More Than a Traditional IUL?

In certain modeled comparisons we’ve evaluated, the IUL JUMP Strategy has produced approximately 40% more projected retirement income than the traditional IUL structure being compared.

Again, that is not a universal result.

The traditional IUL and JUMP Strategy need to be compared using clearly stated assumptions for funding, crediting, policy charges, loan provisions, loan costs, distributions, death benefit and longevity.

Then extend both models to age 95.

Here’s the Age-95 Stress Test I’d Want

Start with the baseline illustration.

Then run:

1. The planned retirement age
2. Retirement five years earlier
3. The planned retirement distribution
4. A higher distribution
5. A lower distribution
6. The current applicable 5% loan rate
7. The contractual maximum 6% loan rate
8. Lower indexed-crediting assumptions
9. Several 0% crediting periods
10. Weak crediting early in retirement
11. Applicable policy charges
12. All planned future JUMPs
13. No additional future JUMPs
14. An unexpected large distribution
15. The full projection through age 95

Then compare the results side by side.

Don’t Just Ask Whether the Policy Is Technically Still In Force

This is another important distinction.

A policy barely hanging on at age 95 isn’t the same thing as a policy with meaningful remaining margin.

Look at how much cushion exists.

Look at the relationship between policy values and indebtedness.

Look at what happens if age 95 isn’t the end of the story.

Because What If You Live Past 95?

That’s the obvious next question.

Age 95 isn’t a finish line.

It’s a planning checkpoint.

If the policy is supposed to help protect your retirement independence, run it beyond the age you think you’ll reach.

You don’t lose anything by seeing the numbers.

The Real Age-95 Question Is About Independence

At 55 or 60, retirement can feel like a math problem.

Account balances.

Income projections.

Taxes.

Rates.

At 95, the meaning of the money may be very different.

It’s being able to stay where you want to live.

Pay for help when you need it.

Handle your own bills.

Make your own decisions.

Not feel like your children have to rescue the plan.

That’s the Thought People Don’t Always Say Out Loud

“I don’t want to ask my kids for help.”

“We should be able to handle this ourselves.”

And underneath both of those:

“What if we mess this up and regret it?”

That’s why I would rather find a weakness in the projection at 60 than discover it in real life at 85.

The Bottom Line

What happens to an IUL if you live to age 95?

There is no single answer that applies to every policy.

A properly designed and maintained policy may be projected to remain in force and continue supporting retirement distributions through advanced ages under the assumptions tested.

Another policy may require lower distributions, different management, additional funding, or other changes to improve long-term durability.

The result is affected by:

Starting policy values.

Retirement age.

Distribution amount.

Indexed-crediting results.

Policy charges.

Policy-loan costs.

Outstanding indebtedness.

Future JUMPs.

Unexpected withdrawals or loans.

And longevity.

So don’t ask only:

“How much can I take when I retire?”

Ask:

“What does the entire policy look like when I’m 95?”

How We Run the Age-95 Test at FPP Financial

At FPP Financial, we use our Retirement Math Method™.

We don’t stop at the first retirement-income number.

We’ll run the strategy through advanced ages.

We’ll look at projected retirement income.

We’ll look at policy values.

We’ll look at cash surrender value.

We’ll look at outstanding policy indebtedness.

We’ll look at applicable policy charges.

We’ll look at net death benefit.

We’ll model the current applicable 5% loan rate.

We’ll stress-test the contractual maximum 6% loan rate.

We’ll test lower indexed crediting.

We’ll test multiple 0% crediting periods.

We’ll test weak years early in retirement.

We’ll test different retirement ages.

We’ll test different distribution amounts.

We’ll test future JUMPs.

We’ll test no future JUMPs.

Then we’ll extend the analysis to age 95 and beyond.

I don’t try to sell you on the strategy. I make the strategy prove itself with the math.

Want to See What Your Retirement Strategy Looks Like at Age 95?

That’s a number worth seeing before retirement begins.

In certain modeled comparisons we’ve evaluated, the IUL JUMP Strategy has produced up to approximately 300% more projected retirement income than the 401(k), Traditional IRA, or comparable tax-deferred retirement strategy being evaluated.

In certain modeled comparisons, it has also produced approximately 40% more projected retirement income than the traditional IUL structure being compared.

Those are modeled results, not guarantees.

And neither percentage means much if the underlying strategy can’t withstand a long retirement.

The number isn’t the reason to buy it. The assumptions behind the number are what you need to understand.

Don’t just believe the 300% number. Make the strategy prove where the difference comes from with the math.

The 300% isn’t the sales pitch. It’s the question.

Show me exactly where the difference comes from.

Let the math do the talking.

Schedule Your Tax-Free Retirement Strategy Meeting

Explore More

• Can an IUL Provide Retirement Income for the Rest of Your Life?
• How Long Can You Take Retirement Income From an IUL?
• How to Stress-Test an IUL Before You Use It for Retirement

Disclosure

This material is for educational purposes only and is not intended as individualized investment, securities, tax, legal, underwriting, or insurance advice. Indexed universal life insurance is permanent life insurance and is not a qualified retirement plan, IRA, brokerage account, mutual fund, index fund, savings account, or direct investment in a market index.

References to age 95, 25-year, 30-year, 35-year, or other longevity scenarios are hypothetical planning and stress-testing periods. They are not predictions of an individual’s lifespan and do not guarantee that any particular indexed universal life policy will remain in force, maintain specified values, or support retirement distributions for those periods.

Projected retirement income from an indexed universal life policy is not guaranteed unless specifically identified as guaranteed under the applicable insurance contract. Nonguaranteed illustrated values can vary materially from actual policy results.

There is no universal or guaranteed number of years that retirement income can be accessed from an indexed universal life policy. Projected income duration is affected by policy design, premiums, policy values, indexed-crediting results, policy charges, cost of insurance, loan provisions, loan rates, outstanding indebtedness, withdrawals, retirement distributions, retirement timing, longevity, death-benefit objectives, policy management, and other factors.

References to approximately 12% annual retirement distributions describe modeled distribution levels under specific assumptions. They should not be interpreted as universal safe withdrawal rates, guaranteed distribution rates, guaranteed lifetime income, or assurances that an indexed universal life policy can sustain those distribution levels through age 95 or any other age.

Simple examples of cumulative distributions or percentages of hypothetical policy values are arithmetic illustrations only. They do not establish the amount that can sustainably be accessed from an actual policy.

Policy loans create indebtedness under the applicable insurance contract and generally accrue applicable loan charges. Loan provisions, loan rates, repayment provisions, treatment of values associated with outstanding loans, and treatment of unpaid loan charges vary by insurance contract. Actual policy provisions control.

Matching Indexed Participating Loans are policy loans. They are not free contributions, employer matches, bonuses, tax credits, guaranteed gains, or direct investments in a market index. Under the strategy described here, Matching Indexed Participating Loan proceeds are modeled as being redeployed into the same policy as additional funding. Associated policy indebtedness and applicable loan costs remain part of the policy economics.

References to loan-funded policy value continuing to participate in an applicable indexed-crediting strategy describe the strategy mechanics being modeled and should be verified against the applicable current approved illustration and actual insurance contract. Policy-specific loan and crediting provisions govern actual results.

With the policy structure discussed in this article, the applicable loan rate is currently 5%, with a contractual maximum loan rate of 6% for the applicable loan feature. The current applicable rate should not be interpreted as a guarantee that the rate will remain at 5%. Current and maximum loan provisions should be verified against current approved policy information and the actual insurance contract.

Simplified examples comparing indexed crediting with an applicable policy-loan cost illustrate only the economic relationship between the two rates. They do not represent the policy’s complete return, guaranteed profit or loss, or exact dollar effect on policy values. Actual results are affected by policy values, outstanding indebtedness, timing, crediting mechanics, cost of insurance, administrative expenses, other policy charges, withdrawals, distributions, and other contractual factors.

Positive arbitrage is not guaranteed. Periods in which applicable indexed crediting is below the applicable policy-loan cost can create unfavorable loan economics. Prolonged unfavorable loan economics combined with policy charges and retirement distributions can place additional pressure on policy values and long-term policy durability.

A 0% indexed-crediting floor applies to the applicable indexed-crediting calculation under the example discussed and does not guarantee that overall policy value cannot decline. Cost of insurance, administrative expenses, policy-loan costs, withdrawals, retirement distributions, and other policy mechanics can continue to affect policy values during a 0% indexed-crediting period.

Indexed universal life insurance does not directly invest policy cash value in the S&P 500 or another market index and does not provide ownership of underlying index securities through the indexed account. Indexed-crediting results should not be confused with market-index returns or direct investment performance. Dividends from the S&P 500 are not received as they would be through direct ownership of the underlying securities.

The historical 6.87% indexed-crediting example discussed in this article is based on an analysis of annual S&P 500 price changes from 2006 through 2020, excluding dividends, and applying the stated 10% cap and 0% indexed-crediting floor. Negative annual price changes were replaced by 0% and positive annual price changes above 10% were capped at 10% for purposes of that historical analysis. The resulting annual capped-and-floored figures averaged approximately 6.87%. Historical results do not predict future policy performance and should not be interpreted as a guaranteed future indexed-crediting rate, compound annual growth rate, net policy return, or historical total return of the S&P 500.

The simplified 1.87-percentage-point modeled positive spread represents the mathematical difference between the 6.87% historical indexed-crediting result used in the referenced model and the current 5% applicable policy-loan rate. It is not a representation of net policy return after cost of insurance, administrative expenses, other policy charges, withdrawals, distributions, or other factors and is not guaranteed to occur.

The modeled effective JUMP results of approximately 8.74%, 11.61%, 14.48%, and 17.35% are not S&P 500 returns, indexed-crediting rates, compound annual growth rates, net returns after policy charges, participation rates, cap rates, or guaranteed policy returns. They are modeled effective results under assumptions used in the referenced JUMP analysis, before accounting for applicable policy charges and other factors.

Future JUMPs and associated death-benefit increases are subject to future underwriting and approval. Initial policy approval and prior successful JUMPs do not guarantee future increases. Health, income, employment, existing insurance, driving history, occupation, hazardous job duties, risky hobbies, and other applicable underwriting factors may affect eligibility for additional coverage.

Death-benefit increases associated with planned JUMPs are designed to create additional funding capacity under the intended policy design while managing applicable MEC limits. Increasing death benefit does not by itself guarantee non-MEC status. Actual policy design, premium funding, tax rules, underwriting approval, applicable procedures, and contract provisions control.

Under the strategy mechanics described, failure to qualify for a future JUMP does not necessarily mean prior successful JUMPs or the previously achieved matching-loan level automatically disappear. Actual policy rules govern each case, and retirement-income projections should be updated when future JUMP assumptions change.

Policy loans generally can reduce policy values and death benefits and increase lapse risk. Outstanding policy indebtedness generally reduces the net death benefit payable under the insurance contract. A policy that lapses or is surrendered with gain and outstanding indebtedness may create taxable income under applicable tax rules.

Policy values from a properly structured and maintained non-MEC life insurance policy may potentially be accessed through withdrawals to basis and policy loans without current income taxation under current federal rules, subject to applicable requirements. Tax treatment can be affected by basis, MEC status, policy lapse, surrender, outstanding indebtedness, and other circumstances.

The up-to-approximately-300% projected retirement-income result cited in this article refers to certain modeled comparisons involving the IUL JUMP Strategy and a 401(k), Traditional IRA, or comparable tax-deferred retirement strategy. It is not a universal result or guarantee and should not be interpreted as 300% more investment return, indexed interest, policy-loan arbitrage, net policy return, sustainable withdrawal rate, guaranteed lifetime income, guaranteed income through age 95, or S&P 500 performance. Funding, taxes, market assumptions, policy-loan mechanics, loan rates, indexed-crediting results, policy charges, future JUMPs, retirement timing, distributions, longevity, and other assumptions can materially alter projected results.

The approximately-40% projected retirement-income result refers to certain modeled comparisons involving the JUMP Strategy and the traditional IUL structure being evaluated. It is not a universal result or guarantee. Funding, indexed-crediting assumptions, policy charges, loan provisions, loan costs, future JUMPs, death-benefit structure, retirement distributions, and longevity can materially alter the comparison.

A larger modeled retirement-income amount does not by itself establish that the income is guaranteed through age 95, that the insurance policy will remain in force through age 95, or that the strategy will provide more cumulative spendable income than another strategy under all assumptions. Comparisons should evaluate projected income, projected duration, policy condition, taxation, costs, remaining values, legacy objectives, and relevant guarantees using clearly stated assumptions.

Policy-specific guarantees, nonguaranteed elements, underwriting requirements, death-benefit options, MEC limits, cost-of-insurance provisions, policy charges, surrender provisions, loan provisions, loan rates, caps, participation rates, spreads, crediting methods, lapse provisions, repayment options, maturity provisions, and distribution mechanics should be verified against current approved illustrations and the actual insurance contract.

FPP Financial does not provide tax or legal advice. Consult qualified tax, legal, and financial professionals regarding your individual circumstances before purchasing or modifying life insurance, taking policy loans, accessing policy values, or implementing any retirement-income strategy discussed here.