What is an (IUL) Indexed Universal Life
Indexed universal life insurance (IUL) is permanent life insurance that offers death benefit protection when death occurs. Like other forms of permanent life insurance, your premium payments may earn interest and grow the cash value of your policy. What differentiates IUL from other permanent life insurance is the way interest is credited to the policy. In addition to offering a traditional declared interest rate, IUL also offers the ability to earn interest that is linked to the movement of a selected stock market index over a specific period of time.
What Can an IUL do for you?
Even if the index goes down, your credited interest rate is never less than 0%. Guaranteed.
The manner in which interest is credited to your IUL policy gives you the potential for strong cash value accumulation. A key
benefit to remember is that it offers protection from market risk. With IUL, you don’t participate directly in the stock market
and the credited interest rate is never less than zero percent, guaranteed.
IUL can help…
• Provide financial support to your family in a time of need
• Supplement your retirement income, generally tax-free
• Potentially reduce income taxes in retirement
• Pay medical bills during an illness
• Pay off debts like credit cards and student loans
• Pay down – or pay off – a mortgage
• Pay college tuition
Living benefits
The main benefit of life insurance is the invaluable death benefit protection it provides, but it can also offers
Accelerated Death Benefits, which means you may be able to utilize a portion of the death benefit while you’re living.
With Accelerated Death Benefits, the owner can accelerate a portion of the death benefit should the insured meet
the criteria of a qualifying event.
Retirement gap
Maybe you feel that you’ve started planning for retirement too late, or you’re concerned that you won’t have enough saved by the time you retire. Life insurance provides death benefit protection, but also can help with the retirement gap too. With some life insurance policies, you can use the potential cash value growth to help supplement your retirement income. You can access cash value through policy loans or withdrawals and the money could be used for a generally tax-free income stream.1 The following product type may help you fill the retirement gap in your financial strategy.
Indexed universal life:
Life insurance that can protect and provide
Indexed universal life (IUL) insurance is death benefit protection that also provides the opportunity to build long-term cash value by earning interest that is linked to the movement of a selected stock market index over a specific period of time. Although growth is based on a stock market index, your premium is not actually invested in the market or in the applicable index. IUL products are subject to all policy fees and charges normally associated with most universal life insurance. That’s a mouthful, but essentially IUL products can protect your family and potentially provide for them in the long run.
Bet you didn’t know life insurance could do that.
With an IUL product, the policy owner can take advantage of the upward movement of a selected stock market index while being protected from a downward performance through the power of the 0% floor, meaning the index credited will not be less than zero percent.
In other words, an IUL policy can offer you the opportunity to build cash value without a negative index performance hindering your earning potential. The earning potential is calculated based on several factors, including a maximum interest rate, the amount of premium allocated to the index account, the floor, and/or a spread rate, which is subtracted from the index growth. The cash value you build may be used in many ways, from college funding1 for your kids, to helping supplement your retirement income.
IUL products can help you prepare financially for the potentially high cost of future medical bills.
In addition to offering death benefit protection and cash value growth potential, IUL products may also include accelerated death benefits. Often, available at issue for no additional premium, these benefits allow the owner to accelerate a portion of the benefit, should you be diagnosed with a qualifying illness, subject to eligibility requirements. The accelerated death benefit payment could be used to pay bills, make up for missed work due to your illness, fund family vacations, or in any other way you choose.
Living benefits
The main benefit of life insurance is the invaluable death benefit protection it provides, but it often also offers
Accelerated Death Benefits, which means you may be able to utilize a portion of the death benefit while you’re living.
With Accelerated Death Benefits, the owner can accelerate a portion of the death benefit should the insured meet
the criteria of a qualifying event. Payment of accelerated death benefits paid under the endorsement is intended for
favorable tax treatment under Section 101(g) of the Internal Revenue Code. The funds can be used for any purpose you
choose, such as covering illness expenses. These benefits are included for no additional premium charge at issue on
eligible policies.
Accelerated Death Benefits are subject to eligibility requirements. An administrative fee may be required at the time
of election. The death benefit will be reduced by the amount of the death benefit accelerated. Since benefits are paid
prior to death, a discount will be applied to the death benefit accelerated. As a result, the actual amount received
will be less than the amount of the death benefit accelerated.
For more information, please ask your financial professional for the Accelerated Death Benefits consumer brochure.
