Discover the Living Benefits of Index Universal Life
Life insurance that does more than one job.
Protection now. Tax-advantaged access later.
Build cash value with a floor under it.
A permanent policy that can grow with the market, without the market's downside risk.
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What is Index Universal Life (IUL)?
Indexed universal life insurance is a type of permanent coverage, which means it can last your entire life and build cash value. Unlike other types of universal life, an IUL policy places the cash value in sub-accounts that mirror a stock index, such as the S&P 500. As an alternative to indexed accounts, IUL policies also offer fixed account options that earn interest at a set rate.
How Index Universal Life Insurance works?
Things to Consider:
Adjustable premiums and death benefit
As with universal life, IUL premiums are adjustable. If you ever decide to skip a premium payment or underpay, the cost of insurance and policy expenses are deducted from your cash value. You may also be able to adjust the death benefit amount if your needs change. However, you may be asked to complete a life insurance medical exam if you apply to increase your coverage.
Cash value accumulation
The cash value is placed in one or more sub-accounts that mirror the performance of a stock or bond index, such as the S&P 500. You can choose which accounts to invest in based on what the insurer has to offer. The insurer then pays interest to policyholders based on the performance of the index. As the index goes up, the account earns interest. If the index drops, the account earns less or nothing.
Tax Advantages
Enjoy potential tax advantages with IUL. Policyholders may have the opportunity to access cash values through withdrawals or loans on a tax-favored basis, providing flexibility in managing their financial resources.
Living benefits and riders
IUL policies may offer living benefits and optional riders, allowing policyholders to access funds for critical illness, chronic illness, or long-term care needs. These additional features enhance the policy's versatility and can provide financial support during unexpected circumstances.
Market Participation and Cap Rates:
Understand the policy's participation rate in market indexes and any imposed cap rates on returns. While IUL provides market-linked growth, knowing the limitations or caps can help set realistic expectations regarding potential returns.
Flexibility and Premium Adjustments:
Evaluate the flexibility the policy offers in adjusting premiums and death benefits. Ensure that the policy aligns with your changing financial needs, allowing you to adapt to circumstances such as income fluctuations or changes in life goals.
Policy Charges and Expenses
Charges and expenses associated with the policy, such as cost of insurance, administrative fees, and rider charges. Understanding these costs is crucial for assessing the overall performance and efficiency of the IUL policy..
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