Index Universal Life (IUL) Insurance is a type of permanent life insurance that offers both a death benefit and a cash value component. The cash value can grow over time, with interest credits linked to the performance of selected market indices, such as the S&P 500. This allows policyholders to potentially benefit from market gains while having protection against market downturns. IUL policies also provide flexibility in premium payments and the ability to adjust the death benefit to align with changing financial needs.
Key Features:
- Growth Potential: The cash value in an IUL policy has the potential to grow based on the performance of chosen market indices, offering opportunities for higher returns compared to traditional whole life insurance policies. westernsouthern.com
- Downside Protection: IUL policies typically include a guaranteed minimum interest rate, ensuring that the cash value doesn’t decrease due to negative index performance. progressive.com
- Flexibility: Policyholders can adjust premium payments and death benefits within certain limits, allowing the policy to adapt to changing financial circumstances. nerdwallet.com
- Tax Advantages: The cash value growth in an IUL policy is tax-deferred, meaning you won’t pay taxes on the earnings as they accumulate. Additionally, the death benefit is generally paid out income tax-free to beneficiaries. westernsouthern.com
Indexed Universal Life Insurance can be a valuable tool for those seeking lifelong coverage with the potential for cash value growth linked to market performance. It’s essential to work with a knowledgeable insurance professional to determine if an IUL policy aligns with your financial objectives and risk tolerance.
Two Great Ways to Harness an IUL
Index Universal Life Posts
Money. Wealth. Life Insurance.: How the Wealthy Use Life Insurance as a Tax-Free Personal Bank to Supercharge Their Savings– Jake Thompson
Main Idea / Thesis: Jake Thompson argues that life insurance, particularly Whole Life Insurance, is …
Look Before You LIRP: Why All Life Insurance Retirement Plans Are Not Created Equal, and How to Find the Right One for You – David McKnight
Main Idea / Thesis: David McKnight’s Look Before You LIRP is a follow-up to The Power of Zero, offer…
Tax-Free Retirement – Summary, Key Learnings, and Action Steps
Main Idea / Thesis Patrick Kelly’s Tax-Free Retirement challenges the conventional approach to retir…
The Retirement Miracle
Main Idea / Thesis Patrick Kelly’s The Retirement Miracle argues that most Americans are saving for …
The Power of Zero – Summary, Key Learnings, and Action Steps
Main Idea / Thesis David McKnight’s The Power of Zero argues that the current U.S. tax system is uns…
Unlocking Financial Freedom: 10 Lessons from “Becoming Your Own Banker”
10 key lessons from Nelson Nash’s "Becoming Your Own Banker" book which advocates for a paradigm shi…