Life Insurance:
What is an IUL?
What is an IUL?
Are you looking for life insurance? Or do you want a second opinion on the insurance you now have? We can help! The ideal life insurance policy for you depends on a variety of factors. However, we can guide you through your options. Many people are aware of the main purpose of life insurance; it provides a death benefit to your beneficiaries. However, the right type can actually be used to generate income for you while you are still living. You might be able to accomplish this with indexed universal life (IUL) insurance. So, what is an IUL, how does it work?
What is an IUL, and How Does it Work?
An insurance company will issue you a life insurance policy in exchange for the premium you pay. An IUL insurance is often “max-funded,” which means the entire premium is paid upfront. The insurance company protects your money, and the policy is linked to an index, which allows it to accrue interest at a reasonable rate** over time. However, the money is not invested in the stock market. In fact, regardless of what happens in the market, you know the money in your IUL will still remain protected.
You may also have the option of connecting your IUL to multiple indexes. This spreads out the possible rate of return rather than relying solely on one index’s performance. If you borrow against your cash value (the money kept in the IUL) you can use it as a source of tax-free* income. If you have money in retirement accounts and don’t want to dip into them yet, purchasing an IUL and using it as a source of income instead may be a good option for you.
IUL Benefits
An IUL offers numerous benefits if you choose to utilize it for retirement. These include:
- Protection of your cash value from the risk of the stock market
- Potential for indexed interest at a reasonable rate**
- Possibility of “locking in” your gains
- Flexibility of choices compared to some other options out there
- Tax-free* income
- No penalties for early withdrawal