Overfund IUL to MEC line — tax-free retirement income via policy loans.
IRC §7702 caps how much premium you can pay per unit of death benefit before the policy becomes a MEC. Design an IUL right below the MEC line — cash value grows tied to S&P 500 (typically 0% floor, 8–12% cap), tax-free. In retirement, borrow against cash value tax-free (no income tax, no LTCG). Best when 401(k)/IRA already maxed. Watch out for: high internal costs, illustration abuse, need for 10+ year hold.
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Overfund whole life, borrow against cash value at 5–6%, arbitrage into real estate.
Business pays premium, executive gets death benefit — pennies on the dollar of tax exposure.
Wrap hedge funds/PE inside a tax-free life policy — no LTCG, no ordinary income.
Borrow at SOFR+1.5% to pay life insurance premiums, arbitrage against policy crediting.
Business pays deductible premiums to owner-controlled captive — up to $2.85M/yr tax-free receipts.
Layer umbrella and excess policies for $5M–$50M liability coverage at $500–$5K/yr.
Take higher deductibles on rarely-claimed policies; pocket the premium savings.
Company-owned life on a critical exec — cash value grows tax-deferred, death benefit tax-free.