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Indexed Universal Life Insurance is a type of permanent policy that allows the insured to accumulate cash value in addition to their death benefit. It will provide security against passing away too young, becoming ill or living too long.
Want to learn more for you or how to start one for your children? Click these links to watch a short video.
How Does Indexed Universal Life (IUL) Insurance Work?
When a premium is paid, a portion pays the cost of insurance based on the life of the insured, and the rest is added to the cash value of the policy. The total amount of cash value is credited once a year with interest based on increases in an index (but it is not directly invested in the stock market).
How much can I start with?
You can start with as low as $50 a month. However, the goal with most clients is tax-free retirement income, so the higher your monthly premium, the faster your cash value grows. Below are our recommendations based on your Age
20yrs - 25 yrs: $200 - $250
26yrs - 30 yrs: $250 - $300
31yrs - 35 yrs: $300 - $350
36yrs - 40 yrs: $350 - $400
41yrs - 45 yrs: $400 - $450
46yrs - 50 yrs: $500 - $800
50yrs- 60yrs: $1000+
There are many advantages to having an IUL policy:
Less risk: The policy is not directly invested in the stock market, thus reducing risk to zero.
Interest rate ranges from 0% in a negative year for the stock market - 20-30% in years where the market is strong. (Based on participation rate)
Tax free- You don’t pay taxes on interest earned!
Easier distribution: After the surrender period, the cash value in IUL insurance policies can be accessed at any time without penalty, regardless of a person’s age.
Access death benefit while alive if you become Critically, Terminally, or Chronically ill.
Death benefit: This benefit is permanent, not subject to income or death taxes, and not required to go through probate.
There are few disadvantages to IUL. First, it does take time for the cash value to grow depending on how much your monthly premium is. Also, there is a possibility that in some years you might not earn any interest if the index performs in the negative. This means that you will not gain or lose anything in your cash value for that year.
At Family First Life we don’t sell our own insurance, we partner with over 40 top Insurance carriers, so you are truly able to get the product that best fits your situation.