Who Benefits in Investor-Originated Life Insurance (IOLI)?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Life insurance is traditionally seen as a safety net, ensuring financial security for loved ones after the policyholder’s passing. However, the landscape of life insurance has evolved, introducing innovative concepts like Investor-Originated Life Insurance (IOLO). This guide delves deep into IOLO, shedding light on its benefits, workings, and implications for both investors and policyholders.

What is Investor-Originated Life Insurance (IOLO)?

IOLO, also known as IOLI, is a distinctive life insurance type primarily aimed at generating long-term investment returns for the policyholder. Here’s how it works:

  1. Investors buy whole or universal life policies from insurance companies.
  2. They then leverage the policy’s cash value to secure loans, which are used to fund other investment ventures.
  3. Often, the growth of the initial investment outpaces the loan interest, leading to increased returns over time.
  4. These investments are backed by established insurance companies, making them low-risk and easy to manage.
Investor-Originated Life Insurance

Benefits of IOLO

IOLO is not just another insurance policy; it’s an investment strategy. Here are some of its advantages:

  • Guaranteed Renewable Coverage: IOLO policies offer coverage that can last a lifetime.
  • loan Collateral: The accumulated cash value can be used as loan collateral.
  • tax-deferred growth: Your investment enjoys tax-deferred growth.
  • Probate-Free Death Benefit: The death benefit bypasses probate, ensuring a hassle-free process for beneficiaries.
  • Cost-Effective: Due to its structure, IOLOs are often more affordable than traditional insurance policies.

Who Truly Benefits?

While the insured’s beneficiaries remain unaffected, the real winner in an IOLO arrangement is the policy owner (investor). Upon the insured’s death, the death benefit is directly paid to the investor, who can then utilize it as deemed fit.

How to Acquire IOLO?

If IOLO piques your interest, the first step is to consult a seasoned life insurance agent. They can provide clarity on the nuances of IOLO and help ascertain if it aligns with your financial goals.

What Is Iolo


Investor-Originated Life Insurance (IOLO) is a transformative approach to life insurance, merging the protective nature of insurance with the growth potential of investments. While it offers a plethora of benefits, like any financial decision, it’s essential to understand its intricacies and consult professionals before diving in. With the right guidance, IOLO can be a valuable asset in your financial portfolio, ensuring both security and growth.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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