Kai-zen Strategy
Kai-Zen Strategy helps you maintain your current lifestyle with an index life insurance policy that provides death benefit protection and living benefits in the event of a serious illness, premature death, or an inability to sufficiently save for retirement. The distribution is Tax-Free Income and the principle is protected from Market drops. It also provides insurance needed to cover estate tax, key man, buy/sell, or succession planning for business owners. The most unique and compelling aspect of the Kai-Zen Strategy is that the participant’s contributions are leveraged 3:1. The participant puts 25% and the bank puts 75% of the money into your IUL policy. The potential Increase of your Retirement Wealth can achieved by 60% to 100%.
How Kai-Zen works
Kai-Zen® is different because it uses which are paid into a unique life insurance policy. The policy has been designed to minimize costs while helping to maximize your cash accumulation.
Expense
A portion of the IUL insurance policy premium is used to pay the IUL insurance policy expenses. The policy provides death benefit protection for your family or can be accessed as a living benefit if needed for a chronic or terminal illness once the commercial loan is repaid.
Death Benefit Protection
A cash value life insurance policy with accelerated benefit riders can provide death benefit and/or living benefits that may be tax-free in the event of:
- Critical illnessCancer, Heart Attack, Stroke, etc.)
- Chronic illness(Assistance with daily living, bathing, eating, dressing, transferring, etc.)
- Terminal illness(May provide living benefits if death is expected within 12-24 months. Terms vary by insurance carrier and state.)
Surplus Cash
The surplus cash has the opportunity to earn interest in an external index crediting strategy of your choice, such as the MSCI or S&P 500. Once growth is obtained, that interest is credited to the cash value of the IUL insurance policy. The annual interest amount earned is credited to the IUL insurance policy annually, which protects any growth from losses due to market declines in future years. Disclaimer (i): IUL insurance policy minimum interest rates and interest rate caps vary by carrier and by state.
Cash Accumulation
Potential cash value accumulation for lifestyle needs, such as, supplemental income as you age. Policy features include:
- Interest Crediting Potential(Opportunity for interest credited based on a market index or a fixed rate)
- No Loss of Cash Value, 0% Floor(having a 0% minimum interest rate protects against declines in an index)
- Potential Tax-Deferred Cash Value Growth
- Potential Income Tax Free Distributions Access to cash value using policy loans and other distributions that may be income tax-free)
Case Study
Contribution Summary:
You and the lender contribute for years 1-5. Then the lender uses those contributions as the security for all the additional funds added for years 6-10. The excess leverage provides you the potential for up to 115.47% more protection and distributions than other non-leveraged choices.
If you contribute $40,000/year from years 1-5 with a total of $200,000, the Lender would contribute up to $35,627/year from years 1-5 and $74,277/year from years 6-10. The total Lender contribution is $549,520.
Benefits & Distributions:
Assumptions: Illustrated Growth Rate: 6.71%. Long Term Captial Rate: 20%, Income Tax Rate: 37%.
Comparisons:
Kai-Zen® Vs. Alternative ChoicesSee just how much you get with Kai-Zen® compared with alternatives.
Full comparison details between Kai-Zen® and alternatives.
Conclusions:
IUL with Kai-Zen Leverage would have a potential income of $151,000 instead of $91,000 for traditional IUL. The potential protection Death Benefit with Kai-Zen would be $1.73M at year 1 and 1.75M at age 90, instead of $985K at year 1 and $675K at age 90 for traditional IUL. Other alternatives would also have lower potential income and NO Death Benefit and Living Benefits protection.
Contact us at USA Investment Solution Inc. for more detail and free consultation.