Indexed Universal Life: The All-Around Product

Indexed Universal Life: The All-Around Product

The recent market volatility has prompted many advisors to look for Life Insurance solutions that can help clients achieve their goals while minimizing the impact of market fluctuations.

A product that has gained substantial traction is the Indexed Universal Life policy, a Fixed Life product that can offer clients the potential for growth and protection from market loss.

Product Benefits

Flexible death benefit guarantees.  Clients have access to a 20-year base policy death benefit guarantee (reduced for issue ages 65 and above) plus the optional Extended Death Benefit Guarantee rider.

Helps clients with a product that offers cash accumulation potential and minimizes the impact of market loss.  This product features cap rates as high as 12% and floor to allow advisors to give clients more stable returns over time.  The cap rate allows clients to maximize the interest credits they receive during up markets, while the floor rate protects them from loss during times of market decline.

Average of three market indexes.  Indexed UL uses an annual interest crediting strategy that employs monthly averaging to help protect the interest credited during periods of market volatility.  This strategy uses a blended average of market indexes (S&P 500®, the NASDAQ-100®, and the Dow Jones Industrial Average SM) and weighs them so that clients always benefit more from the better performing indexes.  It’s important to note that Indexed Universal Life policies are not stock market investments and do not directly participate in any stock or equity investments.

Some IUL carriers feature a 140% current participation rate which means that clients could potentially be credited interest at 140% of the actual index return, subject to the cap rate.

Additional Features

Competitive underwriting.  Underwriting options include simplified issue and guaranteed issue for corporate-owned and corporate-sponsored arrangements.

Access to an indemnity style Long-Term Care rider.  Advisors can help clients maintain control of their money and their independence by adding a LTC rider onto the policy for an additional cost.  The LTC rider may be known by different names in different states may not be available in every state and has an additional charge associated with it.

Target clients

Indexed UL may be a good fit for clients who are:

  • Seeking Life Insurance that offers guarantees and the potential for growth
  • Looking for more stable accumulation potential during volatile markets
  • In need of flexible death benefit options
  • Interested in planning for possible LTC expenses
  • 35 to 55 years of age

If you have questions about this product or case design, please contact your Insurance Advisors Life Sales Representative today.

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