LIFE INSURANCE
Indexed Universal Life Insurance (IUL)
Indexed universal life is permanent life insurance that uses index-linked interest-crediting methods for part of the policy value. You are not directly investing in the market index.
How IUL Works
An IUL credits interest according to formulas described in the policy. Features such as caps, participation rates, spreads and floors can affect credited interest. Policy charges continue to apply, and the cost of insurance can increase as the insured gets older.
What to Consider Before You Choose
- Separate guaranteed values from illustrated non-guaranteed values.
- Understand caps, participation rates, spreads and other crediting limitations.
- Review the funding level rather than assuming the minimum premium is the best premium.
- Understand how loans, withdrawals and policy charges can affect long-term performance.
- Plan to review the policy periodically rather than treating it as a set-it-and-forget-it product.
Who Often Considers IUL
IUL may fit someone who needs permanent life insurance and values flexibility and index-linked crediting potential, while accepting that the policy requires more monitoring and contains more moving parts than term or whole life.