Challenge

Dr. Alex wanted to create a pool of money that could be used for multiple purposes — future private school tuition, family travel, or to supplement retirement income later. He wanted market participation but also principal protection, and disliked the idea of locking money away in qualified plans until 59½.

Solution

• Product Type: Self-Funded IUL (3-Pay)
• Premium Design: $50,000 per year for 3 years
• Funding Strategy: After year 3, policy loans are used each year to pay ongoing premiums, allowing the policy to keep growing while Alex never writes another check.
• Additional Feature: Cash value is accessible tax-free through loans at any time, providing a ready source of liquidity for large expenses.

Why It Worked

The IUL provided market-linked growth potential (with a 0% floor) to keep up with inflation, while ensuring Alex would never lose principal due to a market downturn. The short premium commitment matched his desire for a front-loaded wealth strategy, after which the policy became self-sustaining.

Outcome

Within 12 years, the policy has enough projected cash value to begin withdrawing $40,000/year tax-free without depleting the policy. Alex also likes knowing he can take a policy loan if he wants to help fund his child’s college education or invest in a real estate opportunity.