Should You Max Out Your 401(k) Before Funding an IUL?

You have $20,000 available for retirement this year.

But you have more than one place it could go.

Your 401(k) isn’t maxed yet.

You’ve also been looking at indexed universal life.

So now you’re stuck on a very practical question:

“Should I max out my 401(k) first, or should I put some of that money into an IUL?”

That’s a much better question than asking which product is “better.”

Because you aren’t comparing products in a vacuum.

You’re deciding what job the next dollar should do.

The Answer Shouldn’t Start With IUL

If somebody’s answer is automatically:

“Stop putting money into your 401(k) and buy an IUL instead,”

I’d want to see the math.

And if somebody automatically says:

“Always max out every retirement account before you even consider anything else,”

I’d still want to see the math.

Your employer match matters.

Your taxes matter.

Your Roth options matter.

Your age matters.

Your retirement timeline matters.

Your existing retirement balances matter.

Your insurance need matters.

And what you’re trying to create in retirement matters.

Start With the Employer Match

This deserves its own conversation before anything else.

If your employer matches part of your 401(k) contribution, that is real compensation available to you under the terms of your plan.

Don’t casually walk away from it.

Imagine your employer contributes additional dollars when you contribute.

If you redirect your contribution somewhere else and lose that employer money, the IUL needs to overcome more than just the performance of your own 401(k) contribution.

It also needs to overcome the employer contribution you gave up.

That’s Why I Don’t Like Rigged IUL Comparisons

Suppose someone compares:

$10,000 into an IUL

against:

$10,000 into a 401(k).

But your employer would have added another $4,000 to the 401(k).

That’s not an honest comparison.

The real 401(k) side received $14,000 of total funding in that example.

If we’re going to compare strategies, give each side what it actually gets.

Employer Match and Maxing Out Are Two Different Questions

This distinction is critical.

Contributing enough to receive the full employer match is not necessarily the same as maximizing every dollar you’re allowed to contribute to the plan.

Those are two separate decision points.

So your funding order might begin with:

“How much do I need to contribute to capture the full employer contribution available to me?”

Then:

“Where should the dollars above that amount go?”

Now you’re asking the right question.

Why Would Someone Keep Funding the 401(k) Beyond the Match?

There are several legitimate reasons.

You may value the current tax benefit of traditional pretax contributions.

You may have a low-cost plan with strong investment options.

You may want long-term market exposure.

Your plan may offer a Roth 401(k) option.

You may prefer the simplicity of putting more money into an account you already understand.

Those are real advantages.

The Current Tax Deduction Can Be Powerful

Imagine you’re 52 and earning $300,000.

Your tax bill already feels painful.

Traditional pretax 401(k) contributions can reduce current taxable income when applicable.

That’s valuable.

But I want you to separate two thoughts:

“This saves me taxes today.”

and:

“This gives me the best retirement outcome.”

Those statements are not automatically the same.

Tax Deferral Pushes the Tax Decision Into the Future

Traditional pretax 401(k) contributions and earnings generally become taxable as ordinary income when distributed under current federal rules.

That doesn’t make tax deferral bad.

It means you should model both ends of the transaction.

What did the contribution save you today?

What could distributions cost you later?

What other taxable income might exist in retirement?

How large could the pretax account become?

What do applicable RMD rules look like for your situation?

The Person With $100,000 in Pretax Retirement Money Has a Different Problem Than the Person With $2 Million

This is why contribution order can’t be reduced to one slogan.

Imagine you’re 58.

You already have:

• $1.4 million in a traditional 401(k)
• $500,000 in a traditional IRA
• A pension coming
• Social Security later
• Another eight years before you plan to retire

Now you’re deciding where another $25,000 per year should go.

Your problem isn’t lack of tax-deferred money.

You already have a lot of it.

Your question may be:

“Do I want every additional retirement dollar creating the same future tax exposure?”

Now Change the Person

You’re 38.

You have $75,000 in your 401(k).

Your employer offers a valuable match.

You have young children.

Your emergency fund is thin.

You still have consumer debt.

That’s a completely different financial picture.

An IUL shouldn’t be forced into either scenario using the same answer.

What About Roth 401(k) Contributions?

This is another reason the decision needs actual numbers.

If your employer plan offers designated Roth contributions, you may have an opportunity to build retirement assets with different tax characteristics inside the 401(k) itself.

Roth contributions generally don’t give you the same current federal income-tax deduction as traditional pretax contributions.

Qualified Roth distributions are generally tax-free under current federal rules when applicable requirements are met.

That can change the funding-order conversation substantially.

Don’t Let Someone Pretend Every 401(k) Dollar Will Be Taxable

If part of your plan is Roth, say so.

If most of your existing balance is pretax, say so.

If you’re considering switching future contributions from traditional to Roth, model it.

An IUL comparison should be built against the strategy you’re actually considering.

Not the weakest possible version of the 401(k).

So Where Does an IUL Fit?

An IUL may be considered when you have a legitimate permanent life insurance need and also want to evaluate cash-value accumulation as part of a broader retirement-income strategy.

It can provide:

• A permanent life insurance death benefit while the policy remains in force
• Cash-value accumulation
• Indexed-crediting potential
• A different type of downside-crediting structure from direct market investing
• No owner RMD structure like a qualified retirement account
• Potential access to policy values through properly structured withdrawals and policy loans

But none of those points means:

“IUL automatically comes before maxing out the 401(k).”

An IUL Has Costs the 401(k) Doesn’t Have

It’s life insurance.

That means policy charges matter.

Cost of insurance matters.

Surrender provisions can matter.

Funding matters.

Underwriting matters.

Loan mechanics matter if you’re planning to use policy loans later.

A comparison that ignores those costs isn’t useful.

The IUL Also Has a Different Market Relationship

An IUL isn’t directly invested in the S&P 500 or another referenced index.

Indexed interest is calculated according to the policy’s applicable crediting terms.

Those can include:

• Caps
• Participation rates
• Spreads
• Crediting periods
• Indexed-crediting floors
• Other contractual provisions

Under an applicable indexed strategy with a 0% floor, a negative index result may produce a 0% indexed-crediting result rather than negative indexed interest.

But Don’t Hear “0% Floor” and Think “No Risk”

A 0% indexed-crediting result does not mean the overall policy value cannot decline.

Policy charges still exist.

Insurance costs still exist.

Loan costs can still exist.

Withdrawals can reduce values.

Loans can affect policy performance.

The floor applies to the applicable indexed-crediting calculation.

The 401(k) Can Capture Upside the IUL May Not

If your 401(k) owns market-based investments, those investments can participate in market gains according to what you own.

An IUL indexed strategy can limit positive indexed interest through caps, participation rates, spreads, or other applicable provisions.

That’s why the comparison needs both sides.

Downside behavior matters.

Upside behavior matters too.

What About Liquidity?

This is one of the most overlooked funding-order questions.

Imagine you have $25,000 available.

You put every dollar into long-term strategies.

Six months later:

Your roof needs replacing.

You lose your job.

Your business slows down.

Your child needs help.

Now you’re scrambling for cash.

That isn’t good retirement planning.

Don’t Fund an IUL With Money You May Need Next Year

An IUL is a long-term life insurance contract.

Early policy values can be affected by charges and surrender provisions.

It should not be treated like a checking account or emergency fund.

Before deciding whether the next dollar belongs in the 401(k) or IUL, make sure you’re not ignoring basic liquidity.

And Don’t Ignore High-Interest Debt

If you’re paying a very high interest rate on consumer debt, the hurdle rate for any long-term financial strategy becomes harder to justify.

You shouldn’t create an elaborate retirement structure while expensive debt is quietly draining cash flow every month without at least putting that decision into the comparison.

Now Let’s Talk About the IUL JUMP Strategy

The IUL JUMP Strategy changes the conventional IUL funding conversation through a Matching Indexed Participating Loan.

The word “matching” needs context.

It’s not an employer match.

It’s not free carrier money.

It’s not a bonus contribution.

It’s an actual policy loan.

The loan proceeds are redeployed into the same policy as additional funding under the strategy.

Here’s the $10,000 Annual Funding Example

Assume the client contributes $10,000 per year out of pocket.

By Year 11, the client is still contributing:

$10,000 out of pocket.

The additional $50,000 shown comes from the Matching Indexed Participating Loan.

Total annual funding shown in this example becomes $60,000.

That $50,000 Is Not Free Money

It’s borrowed through the policy.

It creates policy indebtedness.

And the loans accumulate.

The Year 5 JUMP doesn’t erase the Year 3 loan.

The Year 7 JUMP doesn’t wipe out the earlier indebtedness.

A fair analysis has to show both:

The additional loan-funded policy value.

And:

The accumulated policy indebtedness.

Why Is the Loan Money Redeployed?

The JUMP design we’re discussing doesn’t use the matching loan for consumption.

The proceeds are redeployed into the same policy.

Conceptually, think about two buckets:

Bucket One: your contributed dollars.

Bucket Two: accumulated Matching Indexed Participating Loan dollars.

Under the indexed strategy used in this example, both buckets have the same potential 10% cap and 0% indexed-crediting floor.

The loan-funded bucket also carries the applicable loan cost.

The Current Applicable JUMP Loan Rate Is 5%

With the policy structure we currently use for the IUL JUMP Strategy, the applicable loan rate is currently 5%, with a contractual maximum loan rate of 6% for the applicable loan feature.

That doesn’t mean the applicable rate is guaranteed to stay at 5%.

So a serious comparison should model the current 5% rate and stress-test the strategy at the 6% maximum.

Where Does the 6.87% Historical Indexed-Crediting Example Come From?

One historical analysis used with this strategy looked at annual S&P 500 price changes from 2006 through 2020.

Dividends were excluded because the policy isn’t directly invested in the index.

The analysis applied a 10% cap and 0% indexed-crediting floor.

Negative annual index price changes were treated as 0% for the indexed-crediting calculation.

Positive annual price changes above 10% were limited to 10%.

Under those assumptions, the period produced a:

6.87% historical average indexed-crediting result.

That isn’t the historical S&P 500 return.

It isn’t a guaranteed future IUL crediting rate.

And it isn’t a guaranteed policy return.

Now Compare 6.87% With the Current 5% Loan Rate

Under those assumptions:

6.87% – 5.00% = 1.87 percentage points.

That’s the modeled positive-arbitrage concept.

If applicable indexed crediting exceeds the loan cost, the loan-funded portion can have favorable economics under the model.

If indexed crediting is 0% while the applicable loan cost is 5%, the economics are unfavorable for that period.

Positive arbitrage is not guaranteed.

What Happens as the JUMPs Increase?

Under assumptions used in one JUMP analysis, the combination of the base indexed-crediting assumption and the positive-arbitrage effect attributed to successive Matching Indexed Participating Loans produced modeled effective results of 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 are modeled effective results under the assumptions used in that analysis.

They aren’t S&P 500 returns.

They aren’t IUL indexed-crediting rates.

They aren’t guaranteed policy returns.

Policy costs and other factors still have to be accounted for.

So Should $10,000 Go Into the 401(k) or the JUMP Strategy?

Now we’re finally asking the question correctly.

Take the same $10,000 of client cash flow.

If that $10,000 goes into the 401(k), what happens?

Does it generate an employer contribution?

Is it pretax or Roth?

What investments will own the money?

What expenses apply?

What retirement income does it project?

What taxes are modeled when money comes out?

Then run the same $10,000 through the IUL JUMP Strategy.

We’ve Seen Up to Approximately 300% More Projected Retirement Income in Certain Modeled Comparisons

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’s relevant when you’re deciding where the next retirement dollar should go.

But it doesn’t mean:

“Always stop contributing to the 401(k) and fund the JUMP Strategy.”

It means:

“Run your actual 401(k) against the strategy and find out.”

The Employer Match Could Change the Result

This is why Post #35 is different from simply asking whether IUL can produce more retirement income than a 401(k).

The funding order matters.

If redirecting $10,000 away from the 401(k) causes you to lose meaningful employer contributions, include that loss.

If you’ve already captured the full employer match and you’re deciding where additional dollars should go, model that scenario instead.

Those are not the same comparison.

The Roth Option Could Change the Result

If the next 401(k) dollar would be Roth rather than pretax, the retirement tax comparison changes.

Model that correctly.

Don’t give the IUL a tax advantage by pretending the alternative is taxable in retirement when qualified Roth distributions would generally be tax-free under current federal rules.

Your Existing Pretax Balance Could Change the Result

If you’re 58 with $2 million already sitting in pretax retirement accounts, another pretax dollar may have a different strategic value than it would for someone with $100,000 saved.

That’s why I want to see the whole balance sheet.

Not just the next contribution.

Your Life Insurance Need Could Change the Result

The IUL includes permanent life insurance.

If you have a legitimate need for permanent coverage, that’s part of the value proposition.

If you don’t, don’t manufacture a need just to make the retirement strategy work.

Your Liquidity Could Change the Result

If putting $10,000 into an IUL leaves you without adequate cash reserves, that’s a problem.

If you’re already sitting on substantial liquid assets and the money is genuinely long-term, that’s a different situation.

This Is Why the 300% Number Needs Context

The number itself isn’t enough.

Ask:

Did the comparison include employer contributions?

Did it model Roth correctly?

Did it account for 401(k) investment expenses?

Did it account for IUL policy charges?

Did it account for taxes?

Did it account for policy indebtedness?

Did it use reasonable retirement-income assumptions?

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

Then Try to Break the JUMP Projection

Lower the indexed-crediting assumption.

Raise the applicable loan rate to the contractual 6% maximum.

Do both at the same time.

Remove a future JUMP.

Run retirement to age 95.

Then make the 401(k) side stronger.

Include the full employer contribution.

Use the actual low-cost investment options if that’s what your plan offers.

Model Roth contributions when appropriate.

Run a strong market sequence.

Then run a bad one.

Compare again.

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

The JUMP Strategy Has Also Produced Approximately 40% More Projected Retirement Income Than a Traditional IUL in Certain Comparisons

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

That matters because the funding-order question isn’t solved by saying:

“I’ll just buy any IUL.”

The design matters.

The loan mechanics matter.

The policy charges matter.

The crediting assumptions matter.

The retirement distribution strategy matters.

Future JUMPs Are Not Guaranteed

If you’re making a long-term contribution decision based on the JUMP progression, you need to understand this before starting.

Each planned future JUMP requires a new application and carrier approval for the increased death benefit.

Qualification can be affected by:

• Health
• Income
• Employment
• Existing insurance
• Driving history
• Occupation
• Hazardous job duties
• Risky hobbies
• Other underwriting factors

Future JUMPs should not be treated as guaranteed at original policy issue.

What If You Miss the Next JUMP?

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

Suppose you’ve already reached a $30,000 Matching Indexed Participating Loan level.

If the next planned JUMP isn’t approved, the prior successful progression doesn’t automatically disappear under the mechanics described here.

You may remain at the previously achieved matching-loan level and potentially reapply at a later policy anniversary, subject to actual carrier rules and approval.

But the projected retirement outcome needs to be recalculated.

A Simple Funding Order Can Look Different for Different People

Consider three people.

Person One: Not Getting the Full Employer Match

They’re contributing 2% to the 401(k), but the employer provides additional matching contributions at higher employee contribution levels under the plan.

Before redirecting money elsewhere, I’d want to quantify exactly what employer contribution they’re leaving behind.

Person Two: Full Match Captured, but 401(k) Not Maxed

This is where the marginal-dollar comparison becomes much more interesting.

The next dollar could go toward:

• Additional pretax 401(k) contributions
• Roth 401(k) contributions when available
• An IUL strategy
• A taxable brokerage account
• Debt reduction
• Other financial priorities

Now run the alternatives.

Person Three: Already Maxing Out the 401(k)

That’s the scenario covered more directly in our separate article on using an IUL after maximizing a 401(k).

At that point, the question is no longer whether to max the plan first.

It’s where the additional retirement dollars should go.

Here’s the Side-by-Side Analysis I Want

Same person.

Same out-of-pocket cash flow.

Same retirement age.

Same retirement-income goal.

On the 401(k) Side, Show Me:

• Employee contribution
• Employer contribution
• Vesting when relevant
• Traditional versus Roth treatment
• Current modeled tax benefit
• Investment allocation
• Plan expenses
• Investment expenses
• Projected retirement balance
• Projected retirement income
• Estimated taxes on taxable distributions
• Applicable RMD assumptions
• Projected ending value

On the IUL JUMP Side, Show Me:

• Client contribution
• Policy charges
• Cost of insurance
• Indexed-crediting assumptions
• Matching Indexed Participating Loans
• Accumulated policy indebtedness
• Current 5% applicable loan rate
• Contractual maximum 6% loan rate
• Future JUMP assumptions
• Projected retirement distributions
• Policy durability
• Projected net death benefit

Then Run the Scenario Where Everything Doesn’t Go Right

What if markets fall right before retirement?

What if taxes are lower than expected?

What if they’re higher?

What if the IUL credits less than illustrated?

What if the loan rate reaches 6%?

What if a future JUMP isn’t approved?

What if you live to 95?

What if you need more retirement income than originally planned?

A strategy should survive more than the best-looking illustration.

The Real Fear Isn’t Choosing the Wrong Account

Imagine you’re 57.

You and your spouse have done well.

You have $1.5 million saved.

The house is almost paid off.

The kids are grown.

You’re earning more than you ever have.

From the outside, everything looks fine.

But retirement is close enough that the decisions feel heavier.

You catch yourself thinking:

“We’ve spent 30 years building this. I don’t want one bad decision at the end to screw it up.”

That’s Why “Which One Has the Highest Return?” Isn’t Enough

You care about income.

You care about taxes.

You care about flexibility.

You care about your spouse being okay if something happens to you.

You care about not becoming financially dependent later.

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

“We should be able to handle this ourselves.”

And underneath the spreadsheet:

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

The Goal Is Not to Win an Argument Between IUL and 401(k)

The goal is to create a retirement structure that works for you.

Maybe that means capturing the full employer match first.

Maybe you continue beyond the match.

Maybe part of the next dollar goes into Roth.

Maybe an IUL earns a place in the strategy.

Maybe it doesn’t.

The numbers should tell you why.

How We Compare the Funding Order at FPP Financial

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

We don’t begin with:

“How do we move money out of your 401(k) and into an IUL?”

We begin with:

“What is your next dollar doing right now, and can we make it work harder toward the retirement outcome you want?”

Show us the employer match.

Show us your contribution.

Show us the traditional and Roth options.

Show us the current tax benefit.

Show us the existing retirement balances.

Then run the IUL JUMP Strategy.

Show the policy charges.

Show the loans.

Show the current 5% applicable loan rate.

Stress-test 6%.

Lower the crediting assumption.

Remove a future JUMP.

Run both strategies deep into retirement.

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

Want to Know Where Your Next Retirement Dollar Should Go?

If you’re contributing to a 401(k) and trying to decide whether you should maximize it before funding an IUL, we can compare the actual choices side by side.

We’ll include your employer contribution.

We’ll account for traditional and Roth treatment.

We’ll account for the IUL’s costs and policy loans.

We’ll stress-test the JUMP assumptions.

And we’ll compare projected retirement income instead of making the decision from a slogan.

If maximizing the 401(k) produces the stronger result for your goals, you should be able to see it.

If splitting the funding or directing some dollars toward the IUL JUMP Strategy produces a stronger modeled outcome, you should be able to see exactly where the difference came from.

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

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

• Should High-Income Earners Use an IUL After Maxing Out a 401(k)?
• IUL JUMP Strategy vs. 401(k): Which Can Produce More Retirement Income?
• What Is the IUL JUMP Strategy and How Does It Work?

Disclosure

This material is for educational purposes only and is not intended as individualized investment, securities, tax, legal, retirement-plan or insurance advice. A 401(k) is a qualified retirement plan and is fundamentally different from indexed universal life insurance. Eligibility, contribution limits, employer contributions, matching formulas, vesting, plan provisions, investment options, Roth availability, distribution rules, expenses and tax treatment vary and are governed by applicable law and the specific employer plan.

Employer matching and other employer contributions can materially affect the economics of a 401(k). A comparison between a 401(k) contribution and another financial strategy should account for any employer contributions that would be received or forfeited as a result of the employee’s contribution decision. Employer contribution formulas and vesting requirements vary by plan.

Traditional pretax 401(k) contributions may provide current federal income-tax benefits when applicable. Taxable distributions from traditional pretax accounts are generally subject to ordinary income taxation under current federal rules. Designated Roth contributions and qualified Roth distributions have different tax treatment. Applicable contribution limits, required minimum distribution rules and other retirement-plan requirements can change.

Market-based investments held through a 401(k) can fluctuate in value and can lose principal. Past performance does not guarantee future results. Investment choices, expenses and risks vary by plan and investment.

Indexed universal life insurance is permanent life insurance and is not a qualified retirement plan, Roth IRA, brokerage account or direct investment in a market index. IUL policies do not own the underlying index securities and do not receive index dividends. Indexed interest is determined according to the policy’s applicable crediting terms, which may include caps, participation rates, spreads and other provisions.

A 0% indexed-crediting floor does not guarantee that overall IUL policy value cannot decline. Policy charges, cost of insurance, loan costs, withdrawals and other policy mechanics continue to apply. Caps, participation rates, spreads, loan rates and other nonguaranteed elements may change when permitted by the insurance contract.

Policy loans are actual policy indebtedness and generally accrue applicable loan charges. Loans and withdrawals can reduce policy values and death benefits and may increase lapse risk. Outstanding policy indebtedness generally reduces the net death benefit payable under the insurance contract.

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, Modified Endowment Contract status, policy lapse, surrender and other circumstances. A policy that lapses or is surrendered with gain and outstanding indebtedness may create taxable income.

Matching Indexed Participating Loans are policy loans, not employer matching contributions, free carrier contributions, bonuses, guaranteed gains or direct investments in a market index. Under the JUMP Strategy described here, Matching Indexed Participating Loan proceeds are modeled as being redeployed into the same policy as additional funding. The associated indebtedness and applicable loan costs remain part of the policy economics.

The JUMP Strategy is modeled with applicable loan charges carried forward during the accumulation design rather than requiring the client to pay those charges out of pocket each year. This does not eliminate the economic cost of borrowing, guarantee positive arbitrage or guarantee that policy values will remain sufficient to support outstanding indebtedness.

References to the $10,000 annual contribution example, JUMP progression, 6.87% historical indexed-crediting example, 1.87 percentage-point modeled positive spread, modeled effective results of 8.74%, 11.61%, 14.48% and 17.35%, current 5% loan rate, contractual maximum 6% loan rate, approximately 40% more projected retirement income, or up to approximately 300% more projected retirement income are illustrative and are not guarantees of future policy performance, positive arbitrage, policy durability, funding capacity, non-MEC status, future JUMP approval, death benefit or retirement income.

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 should not be interpreted as a claim that redirecting contributions away from a 401(k) will always increase retirement income. A funding-order comparison should account for the actual employer match or contribution, traditional versus Roth treatment, investment assumptions, expenses, tax assumptions, retirement distributions, IUL policy costs, loan assumptions and other relevant factors.

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 and does not guarantee future retirement income.

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. Historical results do not predict future policy performance. The modeled effective JUMP results discussed above are not S&P 500 returns, indexed-crediting rates or guaranteed policy returns.

Positive arbitrage is not guaranteed. Periods in which indexed crediting is below the applicable loan cost can produce unfavorable loan economics. Policy charges and other expenses must also be considered when evaluating overall policy performance.

Future JUMPs and associated death-benefit increases are subject to carrier approval and applicable medical, financial, occupational and other underwriting requirements. Future approval is not guaranteed. Income, employment, health and other circumstances can affect future underwriting. Failure to complete a planned future JUMP can materially change projected funding, policy values, indebtedness, death benefits and retirement-income results.

Policy-specific guarantees, nonguaranteed elements, loan provisions, loan rates, caps, participation rates, spreads, crediting methods, expenses, surrender provisions, MEC testing, lapse provisions and death-benefit provisions should be verified against current carrier-approved illustrations and the actual insurance contract.

Tax laws and retirement-plan rules can change. The tax consequences of 401(k) contributions, Roth contributions, employer contributions and life insurance transactions vary with individual circumstances. FPP Financial does not provide tax or legal advice. Consult qualified tax, legal and retirement-plan professionals regarding your individual circumstances.