In this video, we’ll cover what indexed universal life insurance (IUL) is and what benefits it provides. If you’re curious about …
Indexed Universal Life Insurance (IUL) is a type of permanent life insurance policy that offers the potential for cash value growth based on the performance of an underlying index, such as the S&P 500. It also provides a death benefit to the policyholder’s beneficiaries in the event of their death. IULs are a popular choice for those looking for a way to save for retirement, as they offer the potential for tax-deferred growth and the ability to access the cash value through policy loans or withdrawals.
IULs are a type of universal life insurance policy, which is a type of permanent life insurance policy that offers flexible premiums and death benefits. Unlike traditional life insurance policies, universal life policies allow the policyholder to adjust the death benefit and premium payments, as long as the policy remains in force. IULs are a variation of universal life insurance policies, as they offer the same flexibility, but with the potential for cash value growth based on the performance of an underlying index.
The cash value of an IUL policy is linked to the performance of an underlying index, such as the S&P 500. The policyholder does not directly invest in the index, but rather the cash value of the policy is credited with a percentage of the index’s performance. This percentage is determined by the insurance company and is typically between 0-15%. The policyholder does not bear any of the market risk associated with investing in the index, as the cash value of the policy is guaranteed by the insurance company.
IULs offer a number of advantages over traditional life insurance policies. For example, they offer the potential for tax-deferred growth, as the cash value of the policy grows on a tax-deferred basis. This means that the policyholder does not have to pay taxes on the growth of the cash value until it is withdrawn. Additionally, IULs offer the ability to access the cash value through policy loans or withdrawals. This can be beneficial for those looking to supplement their retirement income or cover unexpected expenses.
IULs also offer the potential for death benefit protection. The death benefit of an IUL policy is typically equal to the face value of the policy, which is the amount of money the policyholder pays for the policy. This means that the policyholder’s beneficiaries will receive the full face value of the policy in the event of their death.
IULs are a popular choice for those looking for a way to save for retirement, as they offer the potential for tax-deferred growth and the ability to access the cash value through policy loans or withdrawals. Additionally, they offer the potential for death benefit protection, which can provide peace of mind for the policyholder and their beneficiaries. It is important to note, however, that IULs are complex products and it is important to understand the risks and benefits before investing.