Index Universal Life (IUL)
Life Insurance with Market-Linked Growth Potential
Index universal life (IUL) insurance offers the potential for cash value growth linked to the performance of a market index, such as the S&P 500, while providing a guaranteed minimum interest rate.
This type of insurance combines the growth potential of the market with the security of a fixed rate. It’s a great option for those who want to maximize their cash value growth while still having downside protection.
Benefits
- Potential for Higher Returns: Your cash value can grow based on the performance of a market index.
- Downside Protection: Your cash value is protected from market losses with a guaranteed minimum interest rate.
- Flexibility: You can adjust your premiums and death benefit within certain limits.
- Tax Advantages: Cash value grows tax-deferred, and death benefits are generally income tax-free for beneficiaries.
Example
- An investor purchases an IUL policy and allocates a portion of their cash value to an index account linked to the S&P 500. Their cash value has the potential to grow significantly if the market performs well, but it's also protected from losses if the market declines.
