66 • MARTIN H. RUBY
is down, this means they have to discount the funds they can access. This is why, as we age, we tend to move our portfolios into more secure models; we can’t risk the money not being there when we need it. IUL policies don’t share this problem. Remember when we discussed indexing? Interest credits cannot be less than zero. So that means, even in 2008 when the market dropped, IUL policies didn’t receive negative interest (i.e., lose money). They were just credited zero percent interest. The account didn’t grow, but their funds weren’t taken away by the market, either. The zero percent floor means funds accessed from IUL policies never have a market-value adjustment. If you need $50,000, you can get that money from your full account value, not discounted rate. That is a huge benefit of saving in IUL. Help for the Medical Cost of Aging Another thing that attracted me to IUL? It can deliver additional funds to cover long-term care needs. Every IUL policy is different, but many IUL policies have additional funds that can be used for the medical costs of aging. These policies enable you to borrow from the higher death benefit amount for certain medical needs. The result? You can access more money than is in your account to cover the medical cost of aging. Basically, it would be like walking into the bank and saying, “I have a $20,000 CD, but I have long-term care needs, so please give me $30,000 for it.” The banker would look at you like you’re crazy! What would happen if you went to your stockbroker and said, “I’m going into a nursing home, so please cash out my $20,000 brokerage account for $30,000.” Your stockbroker would say,
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