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Indexed Universal Life (IUL) insurance is a versatile form of permanent life insurance that combines lifelong coverage with a cash value component tied to stock market performance. This innovative policy offers both protection for your loved ones and potential for financial growth.
Key Features
- Permanent Coverage: IUL provides lifelong protection as long as premiums are paid
- Flexible Premiums: Policyholders can adjust premium payments within certain limits.
- Adjustable Death Benefit: The death benefit can often be increased or decreased to suit changing needs.
- Cash Value Growth: A portion of premiums goes into a cash value account that can earn interest based on stock market index performance.
- Index-Linked Returns: The cash value’s growth is tied to the performance of a chosen stock market index, such as the S&P 500 or Nasdaq-100.
- Downside Protection: Most policies offer a minimum interest rate guarantee, protecting against market downturns.
- Upside Potential: There’s opportunity for higher returns compared to traditional universal life policies, though gains are typically capped.
- Secure Retirement – You won’t outlive the retirement income
How It Works
When you pay premiums, a portion covers the cost of insurance and fees, while the remainder is added to your cash value account. This account’s growth is credited based on the performance of the chosen stock market index, typically evaluated monthly or annually.
Advantages
- Potential for higher cash value growth than traditional universal life policies
- Downside protection with minimum interest rate guarantees
- Tax-deferred growth of cash value
- Ability to access cash value tax-free through loans or withdrawals
- Flexibility in premium payments and death benefit adjustments
- Enhanced Death Benefit
- Lifetime Retirement Income
Indexed Universal Life insurance offers a unique combination of lifelong protection and potential for cash value growth linked to market performance. It’s best suited for those seeking permanent life insurance with the opportunity for higher returns without market risk. Properly structured, an IUL can provide a lifelong income at retirement.
Examples
These are some random samples of IUL projections for a healthy male, non-smoker
