Indexed Universal Life Insurance

Indexed Universal Life

Indexed Universal Life Insurance is best for individuals and young couples aiming to save for retirement, college tuition, future real estate investments and business owners looking to set up alternative 401K plans for their employees.

Indexed Universal Life is a type of permanent life insurance that offers the same features as traditional universal life but with an opportunity to earn interest linked to the performance of an indexed account (such as the S&P 500® †), while protecting the policy’s cash value from market risk. Generally, Indexed Universal Life policies have more cash value accumulation potential than other universal life products.

Before you purchase Indexed Universal Life Insurance, you may want to consider the following:

  • Indexed Universal Life is a permanent type with flexible or level premiums.
  • Cash value builds up over time and can be used at the policy holder’s discretion or used to help pay premium.
  • The money inside the policy (i.e. its cash value) grows tax free and, when distributed, it is also tax free.
  • You can take money from the policy via withdrawals and loans (this will decrease the cash value and death benefit if amount borrowed is not repaid).
  • You have the flexibility to switch between the different premium allocation options as your needs change over the lifetime of owning the policy.
  • The policy’s cash value inside the policy is tied to four or five different markets allowing the policy holder to participate in the upswings of the markets while being protected from all of the downswings.
  • The policy does not directly participate in any stock or equity investments. Account values will vary depending upon the performance of the indexed account options selected.
  • Offers flexibility and opportunity to make changes or updates throughout the life of the policy.
† Excluding dividends. Standard & Poor’s®, S&P®, S&P 500®, Standard & Poor’s 500 and 500 are trademarks of Standard & Poor’s Financial Services LLC , a subsidiary of The McGraw-Hill Companies, Inc.. The Product is not sponsored, sold, endorsed or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of purchasing the Product. The S&P 500® Index is an index of 500 stocks that are generally representative of the performance of leading companies in leading industries within the U.S. You cannot invest directly in the S&P 500® Index.
Loans and withdrawals will reduce the death benefit and the cash surrender value, and may cause the policy to lapse. Lapse or surrender of a policy with a loan may cause the recognition of taxable income. Withdrawals in excess of the cost basis (premiums paid) will be subject to tax and certain withdrawals within the first 15 years may be subject to recapture tax. Additionally, policies classified as modified endowment contracts may be subject to tax when a loan or withdrawal is made. A federal tax penalty of 10% may also apply if the loan or withdrawal is taken prior to age 59 1/2.


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