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Peter, you know that I am one of the most enthusiastic supporters of IUL for cash value around this board.
But those business owners most definitely need a 401k! Not just a 401k but profit sharing too.
Then if they want to go over $50k they can add on a DB plan and do a couple hundred thousand if they want to.
And if it is a small business (obviously he is dealing with smaller businesses because most large ones need a 401k to remain competitive in recruiting) the shareholders can have up to over 90% of the total contributions go to them.
When your dealing with a 40% tax bracket, it is hard to beat an immediate 40% advantage vs. after tax..... not to mention you could actually bring them down out of the top brackets of 35% & 40%, down to maybe a 28% or 25% bracket.
The money going into the DB plan could get a 55% advantage. (pre fica)
Not to mention he could still use IUL for the owner inside both the 401k and the DB (for part of it at least).
Combine the tax deductions with a simple group fixed annuity paying 3% and it will beat the after tax IUL hands down. Especially if the deductions get them into a lower tax bracket for the rest of their income.
The agent is really missing some huge opportunities by not listening to you.
You must have missed my first 2 posts on this thread when I attempted to get the OP looking in that way but he does not to debate he wants IUL.
Just noticed the end of your post....