Indexed Universal Life: The Insurance Policy That Can Do It All

1. What Is Indexed Universal Life?

Indexed universal life (IUL) is a type of permanent life insurance policy that lets your clients build cash value while also protecting their loved ones with a death benefit. Unlike traditional whole life policies, which provide a guaranteed rate of return, IUL policies have a cash value that grows based on the performance of a stock market index. This means that your clients have the potential to earn higher returns than they would with a traditional policy.

2. How Does Indexed Universal Life Work?

Each month, your clients pay premiums into their IUL policy. Part of these premiums go towards buying life insurance coverage, while the rest goes towards building cash value. The cash value in an IUL policy is invested in a stock market index, such as the S&P 500. If the index performs well, the cash value in your client’s policy will grow accordingly. However, if the index performs poorly, the policy’s cash value won’t decrease below a certain level.

One of the biggest benefits of IUL policies is that your clients can choose from a variety of different indexes to invest in. This gives them more control over their investment strategy and allows them to tailor their policy to their specific needs.

3. Why Should Your Clients Consider Indexed Universal Life?

There are several reasons why your clients may want to consider an IUL policy. First and foremost, IUL policies offer a unique combination of life insurance protection and wealth-building potential. They allow your clients to build cash value over time, which they can use to supplement their retirement income or pass on to their beneficiaries tax-free.

Another benefit of IUL policies is that they offer flexibility when it comes to premium payments. Clients can adjust their premium payments as their financial situation changes, making it easier for them to stay on track with their financial goals.

Finally, IUL policies are a great option for clients who want to diversify their investment portfolio without taking on too much risk. Since the policy’s cash value is tied to the performance of a stock market index, clients have the potential to earn higher returns than they would with a traditional whole life policy, but with less risk than investing directly in the stock market.

Conclusion

Indexed universal life insurance is a smart choice for clients who want to protect their loved ones while also building wealth. With its unique combination of life insurance protection and investment potential, it’s a versatile product that can be tailored to meet your client’s specific needs. As an insurance agent, it’s important to understand the benefits of IUL policies so you can help your clients make informed decisions about their financial future.

Q/A

1. What are the main benefits of an indexed universal life policy?

2. How does an indexed universal life policy differ from a traditional whole life policy?

3. Can clients adjust their premium payments in an indexed universal life policy?