At its core, an IRA-to-IUL conversion
strategy is a two-step decision-making
1. Does it make sense for you to save in
a tax-deferred vehicle or a tax -free
2. If the answer is a tax-free vehicle, is IUL
the right tax-free vehicle?
There are six key areas to consider prior
to moving forward with this approach.
Reviewing each of these areas can help
you determine if this approach is right for
you, and how to best execute the strategy.
Are you a good fit?
Most of the time, an IRA-to-IUL
conversion strategy is not appropriate for
your entire IRA account balance. So make
sure this strategy is a good ﬁt for you
before allocating any portion of your IRA
to an IUL policy.
• Funds in an IUL policy need time to
accumulate. Therefore, an IRA-to-
lUL conversion should only be used
for the portion of your IRA that
is not needed for income in the next
• Life insurance policies require
medical, and possibly ﬁnancial,
underwriting to determine eligibility.
• Remember: an IRA-to-lUL conversion
should be just one piece of your
retirement planning strategy.
Analyze your IRA to make an
How do you know if an IRA-to-lUL
conversion will improve your retirement
approach? Start by analyzing your current
IRA. Important things to consider include:
• Total tax liability: How much in taxes
will the IRA generate over your
lifetime? Based on this analysis,
you and your ﬁnancial advisor can
decide if moving IRA funds from a tax-
deferred status to a tax-free status
• If the answer is yes (it makes sense to
move funds to a tax-free status), you
– After-tax growth potential: Using
reasonable assumptions for
growth and taxation, what would
the post-tax IRA value be in 10,
20 and 30 years?
– Less favorable market growth:
What would happen to the
IRA value if market performance
is less favorable than assumed?
Compare the IRA analysis to
an IUL illustration
Working with your ﬁnancial professional,
compare after-tax growth in your IRA to
after-tax growth in an IUL policy.