Survivorship Indexed Universal Life Insurance

Survivorship indexed universal life is a type of permanent life insurance that has a cash value and builds a death benefit for the insured person. Compared to standard universal life policies, SIUL typically has higher monthly premiums but can pay out more in coverage.

How does Survivorship Indexed Universal Life work?

In a traditional universal life policy, the cash value grows at the credited interest rate until you reach a predetermined life expectancy. After that point, the cash value continues to grow at a rate that is adjusted for inflation. In other words, the death benefit may continue to rise as you age beyond your life expectancy.

In a survivorship indexed universal policy, the cash value index increases each year by a set percentage based on two factors:

  1. The actual cash value increase already occurring in the universal life policy, and
  2. An additional amount that is a percentage of the death benefit above a minimum guaranteed level of coverage. This growth is called survivorship indexing.

Because average people tend to outlive their life expectancy by a large margin, this type of policy is more likely to pay out at a higher benefit level than the death benefit actually purchased.

Survivorship indexed universal life insurance policies typically have high premiums initially, but they can be worth it in coverage. It is important for people who buy this type of policy to keep the cash value safe from creditors in a lawsuit or bankruptcy.

Survivorship indexed universal life can be complicated and understanding all your options will probably require assistance from an agent who understands the policy. For a free, no-obligation consultation, please click below.