Life Insurance Retirement Plans (LIRPs) are gaining traction among high-income earners, business owners, and anyone looking for tax-free retirement income. But what exactly is a LIRP—and why is it such a powerful (yet often overlooked) tool?

Let’s break it down.

What Is a LIRP?

A LIRP is an overfunded Indexed Universal Life (IUL) insurance policy designed to grow cash value. By maximizing premiums and minimizing death benefit, it builds tax-deferred savings you can access tax-free later.

Think of it like a “Roth IRA with benefits”—no income limits, flexible funding, and added protection.

Why Choose a LIRP Over Traditional Accounts?

LIRPs offer distinct advantages:

• No contribution or income limits
• Tax-free withdrawals—even before age 59½
• No required minimum distributions (RMDs)
• Market downside protection with 0% floor
• Built-in tax-free death benefit for heirs

Who Benefits Most?

LIRPs are ideal for:

• High-income earners seeking more tax-advantaged savings
• Business owners avoiding costly qualified plan rules
• Clients maxing out IRAs/401(k)s
• Those concerned about rising taxes
• Young families wanting savings and protection in one

Tackling the Cost Objection

Yes, permanent insurance has fees—but when designed correctly, LIRPs often cost less than taxes on other investments. ARC’s custom software makes this easy to show in client-facing presentations.

What About Returns?

While LIRPs might not match bull market returns, their consistency and safety are key. ARC data shows that to match a LIRP’s tax-free income, a taxable account would need to earn 9.7% annually—not easy in today’s market.

A Real Example

One ARC client, a 45-year-old business owner, contributed $2,000/month to an IUL instead of a 401(k). By age 65:

• Cash value: $800,000+
• Tax-free income potential: ~$76,000/year
• Death benefit: $1.1 million

No employer contributions. No RMDs. Just smart planning.

Advisors: What You Need to Succeed

To offer LIRPs effectively, focus on:

• Proper design (min death benefit, max funding)
• Clear presentations (we’ve got the tools!)
• Ongoing service (client reviews = long-term success)

ARC equips you with everything—from illustrations to branded presentations—to make these conversations seamless.