52 • MARTIN H. RUBY
IUL IUL. These three letters just may change the entire way you ap- proach your retirement savings. Section 7702 existed for years before people really started tak- ing advantage of it. While the tax code allowed individuals to save in life insurance policies, the life insurance products weren’t very good for saving. That all started to change in the early 1990s, with a new breed of life insurance product designed specifically to help people save and grow their funds, while also getting death protection. That revolution was IUL. IUL stands for “indexed universal life,” a very flexible form of permanent life insurance that is often used as a savings vehicle. I know a lot about IUL. In fact, in the early 1980s, I was head of product development for Capital Holding, an insurance and an- nuity company. At that time, a new concept was brewing in the life insurance industry: universal life, a more flexible form of perma- nent life insurance. While many research papers had been written about the concept, no one had actually gone to market with a product yet. I decided Capital Holding would be one of the first companies to do so. My team and I worked tirelessly to create and launch a UL product. While we weren’t the first product to market, we were close (another carrier beat us by a month). So, while I can’t claim to have invented UL (like Al Gore and the internet), I can say I was there at the beginning. But even with everything I knew about IUL and UL, it hadn’t occurred to me to use it as a savings vehicle myself. After all, most of my funds were in IRAs. For too long, I had bought into the Great American Savings Myth on tax-deferred savings. I had been an enthusiastic promoter of IUL for my daughters, yet I hadn’t stopped to consider it for myself.
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