Pay Off The Mortgage In Half The Time
Would You Like To Learn About A New And Innovative Way To Pay Off Your Mortgage In Half The Time. In The Same Time Build A Nice Retirement Nest And Grow A Nice Size Death Benefit To Leave Behind.
How would you like to pay your mortgage off in half the time with the help of an Index Universal Life Insurance?
In an Index Universal Life insurance, your payments pay for Life Insurance and a Savings Account, where cash value accumulates based on how much money you contribute and how the index performs.
If you have not seen how an Index Universal Life insurance (IUL) works, click here first and then come back to this article.
Using An IUL To Pay Off Your Mortgage
So, you just bought a house. Congratulations are in order. You got an awesome interest rate of 4.1% and if you make your regular monthly payments your house will be paid off in the next 360 months.
Everybody knows that if you make extra payments on your mortgage you will get to cut the time that you are paying off that mortgage.
Let me show you how you can use an IUL to pay off your mortgage a lot sooner that the 360 months, in the same time you will save for retirement and have a life insurance paid for. Let’s say you have not saved any money other than the down payment for your house. You are relatively young. The sooner you start this, the better will work for you. As a rule of thumb for an IUL to work, you will need at least 12 to 15 years.
Pull Money Out As A Loan At 0%
Instead of making extra payments toward your mortgage, you will be making payments in an IUL. If you have more money saved, you can put that money in the IUL as well.
Since you are relatively young, the amount of money that goes toward the life insurance part of an IUL policy is very small. Most of the money will go towards the cash value. The compounding interest will help the cash value grow exponentially. After 12 to 15 years take a 0% loan from the cash value portion of your IUL and pay off the mortgage.
Since this is a loan and not an actual withdrawal from the account, the value in the Cash Value account is still intact and will continue to grow for your retirement.
The loan doesn’t have to be paid back until you pass away and it will be paid from the death benefit. Once you understand the power of compound interest and how much the cash value can grow into your IUL account, for your retirement, you will kick yourself for not signing up for an IUL earlier.
Your Account Has Protection Against Market Crashes
The cash value account in an IUL, is relatively safe against a major crash because of the floor rate of 0%. Also, historically, in the past 20 years the S&P index has provided an average of 8% return. Is that 8% guaranteed… no it’s not. We don’t know which way the market will go.
Update: The 20 years are from 2009 to 2019. Now with the coronavirus market crash, the index return over the past 20 years will be lower. On the other hand, whoever had money into an index protected by a 0% floor rate, feel like the biggest winners, compared with the people that had money linked to the stock market.
Where would you rather put your money into? To pay off a 4.1% loan or into something that produces compound interest at a rate of 8%, it’s safe from a market crash and continues to grow with compound interest.
Added Protection Against Really Dark Days When You Can't Make Your Mortgage Payments Anymore.
Now let me run another scenario for you.
Let’s say that you are 8 years into the 30 years it takes paying off your mortgage. Life is throwing a monkey wrench into your plans and you got fired from your well paid job. You are behind in your payments and you receive the dreaded foreclosure notice.
If you would have made extra payments toward paying off the principal in your mortgage, do you think the mortgage company will take that into consideration and not foreclose on you? Of course not. The only way you will stop that foreclosure process is if you bring money to the table.
Let’s say the only money you have saved are in a tax deferred account, like a 401 K.
Since you are not 59 ½ years old you will have to pay a 10% tax on top of the income tax and your retirement nest egg will take a major hit. If you have an IUL you will be able to get a 0% loan against the cash value in your account. The balance on the cash value will stay the same and continue to grow.
Can you see the power of an IUL policy?
If you would like to learn more about how an Index Universal Life Insurance works and if it is a good product for you, click here
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Hegemon Group International, LLC. (HGI) is a marketing company offering a vast array of products and services through a network of independent affiliates. HGI does not provide insurance products, real estate, legal or tax advice. In the USA, insurance products offered through Hegemon Financial Group, LLC (HFG); and in California, insurance products offered through Hegemon Insurance Solutions, LLC (California License #0I0198) – collectively HFG. HFG is licensed in all states and the District of Columbia, except Massachusetts. In Canada, insurance products offered through Hegemon Group International of Canada ULC in the provinces in which it is licensed.
Florin Chris Uta is an independent associate of HGI.
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