This IUL vs. 401(k) comparison shows quite a difference between these two products. Here we compare Safety of Principle, Tax Consequences, Access to Your Money, Restrictions and Fees.

Tax-Free IUL Savings Vehicle

Safety of Principle:

• Your money is NOT invested in the Stock Market.
• Your Money is NOT subject to volatility.
• Your Money is NOT exposed or subject to investment risk.
• Your Money is NOT subject to investment loss.
• All annual growth is LOCKED-IN permanently and account CANNOT ever depreciate in value.

Tax Consequences:

• Your money grows Tax Free.
• There are NOT Taxes when you retire and withdraw your money.
• There are NOT Taxes when you die.
• There are NOT Taxes when you pass your money to your family.

Access to Your Money:

• You can access your money whenever you need it.
• There are NO early withdrawal penalties.
• You don’t have to pay it back.

Restrictions:

• There is NO limit on how much you can contribute to your plan on an annual basis (up to max MEC limit)
• There is NO age restriction fro withdrawal.

Fees:

• Charges are a fraction of the expenses and administration cost of a traditional qualified plan.

401K – IRA – Pension

Safety of Principle:

• Your Money IS invested in the Stock Market.
• Your Money IS subject to volatility.
• Your Money IS exposed and IS subject to investment risk.
• Your Money IS subject to investment loss.
• Growth is NOT locked-in and account CAN DEPRECIATE in value.

Tax Consequences:

• Your money grows Tax Deferred.
• You PAY Taxes when you retire and withdraw your money.
• You PAY Taxes when you die.
• You PAY Taxes when you pass your money to your family.

Access to Your Money:

• You have limited access to your money
• You PAY early withdrawal penalties.
• You have to PAY it back.

Restrictions:

• There IS a limit on how much you can contribute to your plan on an annual basis.
• There IS an age restriction for withdrawal.

Fees:

• Charge significant fees and expenses and the administration of your account even if the account depreciates in value.