The Challenge of Securing a Traditional Home Loan in Australia

Isla and Harrison living in Sydney, Australia, had saved $750,000 and were eager to enter the Australian real estate market as property investors. However, their limited credit history made it difficult to get a traditional mortgage. Banks either rejected their applications or offered unfavourable terms, requiring them to invest more of their savings.

Discovering the Property for Life Solution: An Alternative to Traditional Home Loans

Frustrated, the couple turned to a financial advisor who introduced them to the Property for Life solution, utilising an Indexed Universal Life (IUL) policy loan. This innovative approach offered an alternative property financing option compared to the Sydney bank loans being offered to them.

How Does Property for Life Work?

The advisor explained how an IUL policy could help them achieve both their investment and property goals:

• Investment Growth: The policy's cash value grows tax-deferred, linked to market index performance.
• Flexible Loans: They could access low-interest loans against the policy's cash value to finance property purchases.

Excited, Isla and Harrison invested $700,000 of their savings into an IUL, splitting it between a loan account ($400,000) and an investment account ($300,000).

Key Outcomes: The Property for Life Solution

IUL Loan Account Advantages

• Lower interest rates (5.75% IUL loan rate vs. 6.35% average Bank loan rate)
• Effective 1.25% interest rate with policy credits
• Rental income covers loan payments
• Property owned outright
• Flexible payments
• No credit checks
• Potential for higher loan to value (LTV) on the index universal life insurance policy loan

IUL Investment Account Advantages

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• Exposure to market growth (up to 11-12% annually)
• Protection against market losses
• Secure loan strategy
• Diversification beyond just property investments
• Future borrowing potential