Indexed universal life insurance is a permanent life insurance policy. It offers the tax advantages of traditional universal life, as well as a cash value account with the potential to earn interest based on the performance of a stock index without exposure to market risk. Contact Hometown Financial Group for more information about index universal life insurance.
Index universal life insurance (IUL) is a type of permanent life insurance. You are covered for your lifetime, as long as you continue to pay your premiums. When you pass away, your beneficiaries receive the death benefit you selected when you purchased the policy.
Index universal life insurance also allows you to invest your premium into a cash value account that tracks the market through index funds, such as the S&P 500. There is a guaranteed minimum rate of return on your premium, no matter what happens in the stock market. There is also a cap to the annual growth on your account, so even if the market is booming, you will only receive interest of up to around 10%.
There are two other types of universal life insurance policies. Fixed universal life insurance policies allow your cash value to grow based on an agreed-upon interest rate. Variable universal life insurance invests your money directly into the stock market, which introduces it to a much higher degree of risk, along with a higher potential for reward.
An interesting advantage of universal life insurance is that the cost of your premiums is calculated based on the cost of insurance. You pay this cost plus administrative fees, and the rest of the money can be put into your cash value. Your premiums are flexible, so you can make adjustments over time as your needs change. The cost of insurance will also rise over time as you grow older, which is why many universal life policyholders draw from the cash value to help pay the increased cost of their premiums.
Like other types of life insurance, you can borrow against the cash value or withdraw from the premiums you put in.
These policies allow your cash value to grow tax-free, so you do not have to pay capital gains taxes even on withdrawals or when you borrow against it. The gains also do not count against your income for Social Security benefits.
Call to speak with a licensed agent about getting permanent coverage with index universal life insurance.
By submitting your information, you give Hometown Financial Group permission to contact you.
Use the calendar below to book an appointment with us!
