Indexed Universal Life Insurance in detail:
Indexed Universal Life Insurance is linked to a stock index like the S&P 500. Instead of being determined by your insurance provider, the amount of interest that the cash value accumulates is determined by the value of the stock index. Indexed Universal Life Policies invest in the stock market without the stock market risk. If the market goes up, you participate in the gain, but if the market goes down, you don’t.
What are the benefits of Indexed Universal Life Insurance?
An Indexed Universal Life Insurance policy can be more flexible than a standard Universal Life Insurance policy. Often you will be able to decide what percentage of your cash value you wish to invest in the indexed fund (the fund that links to the stock index) and/or if you wish to invest any of the cash value into a standard fixed fund.
Also, this type of policy does not usually require as much management and can often be a more cost-effective option.
Typically the insurance provider will guarantee the cash value in the fixed fund, however, it is worth noting that the return amount or revenue from the indexed fund, may be capped at a specified upper cash limit.
Can I access my Indexed Universal Life Insurance funds?
Generally, it is possible to access the cash value of an IULI policy either via an early pay-out or by borrowing against it. This will vary depending on your provider, however, so it is always beneficial to check.
What about the death protection?
An IULI will give your loved ones peace of mind and will ensure that they are financially protected (subject to your agreed benefit amount) in the event of your death. The cash value will also typically grow when it is index linked and can generate an additional tax-free lump sum.
Life Insurance typesFinal Expense Life Insurance
No Medical Exam Life Insurance
Universal Life Insurance
Whole Life Insurance
Term Life Insurance with Living Benefits
Indexed Universal Life Insurance
Guaranteed Life Insurance
Second To Die Life Insurance
Mortgage Life Insurance
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