THE NEW RULES OF RETIREMENT SAVING • 69
flexible enough to possibly deliver all the benefits my daughter had on her list. So I set off to see what I could use my actuarial skills to struc- ture. What I discovered is changing the savings industry. First, let’s talk about life insurance. The number 7702 refers to the part of the U.S. tax code that enables funds inside a life insur- ance policy to accumulate (or grow) tax-free, and provide a death benefit to heirs tax-free. Saying life insurance is good for saving is like saying stocks are good for saving. There are too many different kinds, features and benefits to paint with a brush that broad. Some are clearly better than others. I assume you’re not an actuary. So you probably don’t want to evaluate every kind of insurance on the market and determine the best one for saving. Thankfully, I am an actuary, and I’ve done it for you. Here’s the deal. IUL IUL. These three little letters just may change the entire way you save for the future. Section 7702 existed for years before people really started tak- ing advantage of it. Why? Because while the tax code allowed in- dividuals to save in life insurance policies, the life insurance products on the market weren’t very good for saving. That all started to change in the early 1990s, with a new breed of life insurance products designed specifically to help people like you 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 life insurance that is often used as a savings vehicle, as well as for death protection.
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