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What's Index Universal Life?
Indexed Universal Life (IUL) is a type of permanent coverage, which means it lasts your entire life and builds 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's also offer fixed account options that earn interest at a set rate.
How Index Universal Life Insurance Benefits You
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 Index Universal Life. The cash value's balance continues to grow tax-free. 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
Most IUL policies 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.
Why should you work with The Clowe Agency
Our Trusted Advisors have access to a broad array of insurance companies and products, and can help you with a variety of insurance needs, including Final Expense, Mortgage Protection, Retirement Planning, and more.
Our Trusted Advisors undergo periodic and rigorous Continuing Education training, and are fully recognized by each state as a NIPR™️ Trusted Advisor
Expertise
Our Trusted Advisors are trained professionals who have a deep understanding of the different types of life insurance policies available and can help you choose the one that best meets your needs and goals.
Convenience
Our Trusted Advisors are a more convenient choice than trying to research and compare policies all on your own. We're here to do the legwork for you, comparing quotes from multiple insurance companies and helping you understand the terms and conditions of each policy.
Committed to Service
Our Trusted Advisors provide personalized service and support to help you choose the right policy for your unique situation. We take the time to understand your financial needs and goals, and work with you to find a policy that fits your budget and provides the protection you need.
Things To Consider with IUL's
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 and plan for 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. We'll explain it all for you...in simple terms.
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