What is (IUL) Index Universal Life Insurance?
Index Universal life insurance is a form of permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance) which is invested to provide a cash value buildup. The death benefit, savings element and premiums can be reviewed and altered you as your circumstances change. In addition, unlike whole life insurance, universal life insurance allows you to use the interest from your accumulated savings to help pay premiums.
Premiums, which are variable, are broken down by the insurance company into insurance and savings, allowing you to make adjustments based on your circumstances. For example, if the savings portion is earning a low return, it can be used instead of external funds to pay the premiums. Unlike whole life insurance, universal life allows the cash value of investments to grow at a variable rate that is adjusted monthly or annually.
Index Universal Life Cash Value growth or returns is tied to a Stock Market Index movements. When the market goes up you participate in the gains. When the market goes down your value stays the same. You may only be credited a 0-2% growth rate, but your cash value never goes negative or down like the volatility in a stock market. This could positively affect your cash value as when the markets rise again you may participate in it's growth. Not having a negative return on your cash can be very beneficial.
You can use your cash value proceeds that grow tax deferred and tax free, conditions apply, for other uses like funding education or other things that you desire. You can also get plans that cover Long Term Care needs while your alive, if you need it. If you don't need Long Term Care /LTC, great! Use it for something else. Conditions will apply to keep the proceeds and growth tax deferred and tax free. Call or email us..