Indexed Universal Life

Get the death benefit protection of universal life insurance with cash value growth potential.

Indexed universal life insurance is a type of permanent life insurance, which means it has a cash value component in addition to a death benefit. The money in your cash value account can earn interest based on a stock market index chosen by your insurer, such as the S&P 500 or the Nasdaq Composite. Funds don’t earn a fixed rate of interest but typically come with an interest rate guarantee.

No Fixed Interest Rate

When you purchase indexed universal life insurance, funds in your cash value indexed account don’t earn a fixed rate of interest.

Interest Rate Guarantee

Policies typically include an interest rate guarantee, so a minimum interest rate is paid even if the index produces lower returns.

Adjustable Premium Payments (within limits)

Your policy will likely specify a planned premium for you. However, if you have enough money in your cash value account, you may be able to use those funds to help pay your premiums.

What is Indexed Universal Life Insurance?

Indexed universal life insurance is a type of permanent life insurance that offers the death benefit protection of traditional whole life insurance, as well as the ability to accumulate cash value. The cash value of an indexed universal life policy grows based on the performance of an underlying stock market index, such as the S&P 500. This can provide policyholders with the potential to earn greater returns than if their cash value was invested in a fixed account.

While indexed universal life policies offer some unique advantages, it's important to understand how they work before purchasing one.

Indexed universal life insurance policies are similar to traditional whole life insurance

Indexed universal life policies offer some unique advantages, in that they offer death benefit protection for the life of the policyholder. The key difference is that indexed universal life policies also have a cash value component that grows based on the performance of an underlying stock market index.

The cash value of an indexed universal life policy can be used for a variety of purposes, such as supplementing retirement income or paying for long-term care expenses. Policyholders can also take out loans against the cash value of their policies, though this will reduce the death benefit pay out to beneficiaries.

Most indexed universal life policies also have a minimum guaranteed interest rate that will be applied to the cash value regardless of how the stock market index performs. This helps to ensure that the cash value will grow over time, even in years when the stock market is down.

Indexed universal life insurance can be a good choice for people who want the death benefit protection of traditional whole life insurance, as well as the potential to earn higher returns than with a fixed account investment. However, it’s important to understand the risks involved before purchasing an indexed universal life policy.

If you’re considering an indexed universal life policy, be sure to work with a financial professional to determine if it’s the right choice for you.

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