Indexed Universal Life Insurance

What is Indexed Universal Life Insurance?

An indexed universal life insurance policy (IUL) is a type of universal life insurance with some key differences. The goal of the IUL product is to provide improved cash accumulation and death benefit protection through the use of an index, usually a stock market index.

Like most forms of life insurance, with IUL you’re paying for both death benefit protection and cash value accumulation. The key difference is that indexed universal life insurance policies are more flexible in terms of how these two components work together to provide coverage.

For example, most universal life insurance policies guarantee a minimum return rate of around 2%. You can think of this as the “floor” for your cash value and death benefit – whatever happens to the stock market, you won’t lose money. Then, on top of that guaranteed minimum return, indexed universal life insurance gives you the opportunity to grow your coverage through the use of equity-based investments.

So, if the stock market does well, your coverage will grow even more quickly than it would with a standard universal life insurance policy. But if the market doesn’t do well (or goes down), you won’t lose any money either. This increased flexibility is what makes indexed universal life insurance policies so popular among investors.

There’s more information you should be presented with before you make a final determination on whether or not Indexed Universal Life is the right choice for your family. Click the button below for a free consultation with one of our knowledgeable agents.