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Life Insurance vs. Alternate Investment

The comparison that sells itself

Put identical contributions into an indexed universal life policy and a taxable investment account at the same growth rate, then take the same retirement income from each. The taxable account runs dry in about 14 years. The policy pays for the full 20 — and still leaves a death benefit.

Strategy Six of six · Presented by Neal Brown

The Numbers at a Glance

From the example presentation below
Total contributions (example)
$1M
$100,000 a year for 10 years
Policy: income + legacy
$2.95M
7.28% IRR at life expectancy
Taxable account total
$1.79M
4.97% IRR — depleted in 14.4 years
Life insurance advantage
$1.16M
At life expectancy

How the Strategy Works

Same money in

  • $1,000,000 contributed to each side over 10 years
  • Same 7.65% growth assumption (S&P 500 20-year average)
  • Same $124,104 annual retirement income target

Very different money out

  • The taxable account depletes after 14.4 years of income
  • The policy sustains the full 20-year income period
  • The policy still delivers a $588,891 death benefit at life expectancy

Why the gap exists

  • Policy income via loans is income-tax-free under current law (non-MEC)
  • The taxable account pays tax at a 35% assumed rate every year
  • A 0% floor protects the policy from down-market years

The Example Presentation

Two-page comparison report. The taxable side assumes a 35% ordinary income tax rate; policy values qualify as non-MEC under current law. Values are not guaranteed.
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Want this illustration with your numbers?

This example was prepared for a "Valued Client." A personalized presentation uses your age, your assets, and your goals. Reach out to schedule a conversation with Neal Brown.