IUL Explained

What is indexed universal life insurance? - Investopedia

Indexed univeral life insurance is a lot like universal life insurance, however it does have a couple of wrinkles not found in traditional universal insurance policies. Universal life insurance comes in many different forms, from your basic fixed-rate policy to variable models that allow the policy holder to select various equity accounts in which they can invest. An indexed universal life insurance policy gives the policy holder the opportunity to allocate cash value amounts to either a fixed account or an equity index account. Indexed policies offer a variety of popular indexes to choose from, such as the S&P 500 and the Nasdaq 100.

Understanding Indexed Universal Life - Advisor Today

Equity-indexed universal life insurance, or indexed universal life insurance (IUL), is permanent life insurance that offers all the benefits of universal life with accumulation values tied to a stock market index. An EIUL policy has a fixed interest rate component as well as an indexed account option. Whereas traditional UL may credit 4 percent to 6 percent, EIUL has the ability to receive index-linked gains as high as 18 percent or more. In years in which the index does well, interest-crediting rates will rise, and in years in which the index performs poorly, interest crediting will fall. The policyowner can reap the rewards of stock market-type gains and be protected with minimum-guaranteed interest rates in case of stock-market losses. EIUL otherwise has all of the typical features of traditional UL and operates under the same policy mechanics.
By Glenn E. Stevick Jr., CLU, ChFC, LUTCF

Pros and Cons of Indexed Universal Life Insurance: Wiki

First introduced in 1997, indexed universal life combines a cash growth account with a traditional term life policy extending to age 100 or 120 that pays a benefit upon your death. An IUL compounds market-linked interest on all cash values paid in that are greater than the term insurance premiums, giving you access to your principal and profits during your lifetime, as well as paying a death benefit. The cash account accrues interest based on the upside-returns-only of a market index, such as the Standard & Poor 500. When the market index drops, there is no loss to the account owner. When the market rises after a previous drop, the account owner gets the growth from the bottom, rather than having to wait for loss recovery before actually accruing new growth.

Pros and Cons of Indexed Universal Life: FOX NEWS

According to LIMRA, indexed universal life insurance policy premiums increased 23% in 2014. But financial experts warn this product, which was first introduced in 1997, is not for everyone.
Robert Quinlan, the managing member of Quinlan Care LLC, an insurance agency/brokerage firm based in New York, discusses the pros and cons of this type of life insurance.

Answers to the top questions clients and prospects ask
Most of our clients don’t know anything about the concept of tax-free income in retirement through life insurance products. So, we take our time explaining all the pros/cons, expenses, IRR, what can go right and what can go wrong, in addition to the fun part — estimates on how much money they might have in retirement that they don’t have to report to Uncle Sam.