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:
Who Benefits Most?
LIRPs are ideal for:
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:
No employer contributions. No RMDs. Just smart planning.
Advisors: What You Need to Succeed
To offer LIRPs effectively, focus on:
ARC equips you with everything—from illustrations to branded presentations—to make these conversations seamless.